Bitcoin's volatile week-long slide saw it tumble to below the $40,000 mark on Wednesday as news of further restrictions on cryptocurrency transactions in China added to earlier concerns sparked by Tesla boss Elon Musk's tweets.

Most current data from Glassnode reveal in the past few hours, Binance the world’s largest crypto exchange recorded the highest Bitcoin inflows ever, suggesting a lot of investors are trying to curb their crypto exposure.

Bitcoin, the world's biggest and best-known cryptocurrency, fell about 9% to as low as $38,940.04, even slipping below a key 200-day moving average. It is now down 40% from the year's high of $64,895.22 on April 14.

At the time of drafting this report, the global crypto market cap value stood at $1.9 trillion with the market posting losses as high as $200 billion with an 8.45% plunge over for the day.

Ether, the coin linked to the ethereum blockchain network, dropped about 15% to $2,875.36.

The bearish sentiments in the cryptoverse strengthened after Elon Musk reported Tesla had suspended vehicle purchases using bitcoin, citing environmental concerns, thereby giving the bears much firepower in breaking key support areas within a matter of days.

Recent reports that Chinese financial regulators have warned financial institutions against involvement with cryptocurrencies added more selling pressures.

Market critics anticipate the crypto market was a bubble waiting to burst, as many of these digital assets have near-zero fundamentals backing them.

Recall that a few weeks ago, the Governor of the Bank of England, Andrew Bailey warned investors against excessive exposure to cryptocurrency investments as they have no intrinsic value, meaning that investors could lose all their funds invested in such assets.

China's announcement on Tuesday that it is banning financial institutions and payment companies from providing services related to cryptocurrency transactions, coupled with a warning to investors against speculative crypto trading, seemed to have exacerbated the selling.

Nevertheless, the flagship crypto is still pretty much having a bullish run as in 2021 alone, it has posted gains of over 40% year-to-date and 320% in the past year.