BTC Sees Record Capital Outflows; Voyager Issues Default Notice to 3AC

Chart of the Day

Both equity and crypto markets sank late Monday as investors looked to rebalance their portfolios in the final days of the quarter. BTC has managed to defend the $20k key support despite a 2% decline in the last 24 hours. A key bearish trend line with its upper bound near $21k is taking shape on BTC's hourly chart. A decisive move above this level would likely kickstart another wave of increase. Alternatively, failing to clear the key resistance may send BTC to retest support near the $20.5k level.

The confluence of several on-chain metrics shows that the market has reached its cyclical lows with historically low demand. Digital asset investments that solely focus on BTC saw a staggering $453 million outflow last week, effectively wiping out all inflows year-to-date and leaving the total BTC AUM at just under $24.5 billion, the lowest point since 2021. However, BTC's dive into the oversold territory may present unprecedented buying opportunities. 

In a similar vein, ETH is trading slightly below the $1,200 mark after shedding 2.3% of its market value in the same period. Ethereum usage and network demand have been on a decline after the second-largest cryptocurrency by market cap reached its all-time high in November 2021. Both the daily transaction count and the average gas price point toward a macro downward trend that lasts more than six months, reflecting a waning demand profile in the Ethereum ecosystem. Meanwhile, major altcoins have flipped red, with DOGE and MATIC leading the correction on 7% losses over a similar time frame. 

Talk of the Town

On Monday, crypto brokerage firm, Voyager Digital, announced that it has issued a notice of default to Three Arrows Capital, the embattled crypto hedge fund that has been struggling with liquidity issues, on a loan of $675 million based on BTC's recent price. Voyager revealed that Three Arrows has failed to make the required payment on its loan of 15,250 BTC and $350 million USDC. The company said that it intends to pursue recovery and is currently in discussion with its advisors on legal remedies to meet clients' demands.