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The wrapped version of Bitcoin on Ethereum chain has been one of the most convenient ways to remain exposed to the price fluctuation of the biggest cryptocurrency on the market, while not paying additional fees from changing the network. However, since reaching the ATH of 285,000 BTC, the amount of WBTC on Ethereum descended massively.
After the implosion of LUNA/UST, the balance of Bitcoin wrapped on Ethereum declined by over 35%, which could have been the result of a massive position liquidation that led to the plunge in the number of available wrapped assets on the network.
The total $WBTC Balance wrapped on #Ethereum has declined by over 35% since the collapse of the LUNA/UST project
— glassnode (@glassnode) January 17, 2023
At the peak, there were 285k #Bitcoin wrapped on #Ethereum, and this has since fallen by 101.55k $WBTC over the course of 2022
📊 Live Chart: https://t.co/y3COK5pbuA pic.twitter.com/QWRYyBcV7j
According to the chart shared by Glassnode, the total number of wrapped Bitcoin on the Ethereum chain is still going down heavily, showing that there is no demand for Bitcoin on the network.
The uptrend on the chart prevailed only back in October 2020, when the cryptocurrency market entered a prolonged recovery mode. Though we are seeing the same tendencies today, the amount of wrapped Bitcoins on the Ethereum network is not rising, which we might consider a bearish signal.
Market manipulation?
At the end of this rally on the market, numerous analysts and traders assumed that market manipulation was one of the main reasons behind such explosive performance of Bitcoin and other assets. One of their main proofs was abnormal open interest on most cryptocurrency derivatives trading platforms.
With the lack of growing demand on Ethereum, which usually occurs after a noteworthy move of BTC, market manipulation could be a solid theory behind the market's 10% spike. Unfortunately, if the assumptions of analysts are true, the first cryptocurrency will reverse in the foreseeable future and reach the $19,500 trading range.