So-called “market tourists” are shunning bitcoin (BTC), leaving only long-term investors to hold and transact in the leading cryptocurrency, according to blockchain analytics firm Glassnode.
In its Onchain report for the week of July 4, Glassnode analysts said that June saw bitcoin experience one of its worst performances in 11 years, with a loss of 37.9%. They added that activity on the Bitcoin network is at levels concurrent with the deepest part of the bear market in 2018 and 2019, writing:
However, despite the near-complete purge of “tourists,” Glassnode noted significant accumulation levels, stating that balances of shrimp – those holding less than 1 BTC, and whales – those holding between 1,000 and 5 000 BTC, were “increasing significantly. »
Shrimp, in particular, see current bitcoin prices as attractive and are accumulating it at a rate of nearly 60,500 BTC per month, which Glassnode says is “the most aggressive rate in history.” equivalent to 0.32% of BTC supply per month.
To explain the purge of these tourism-type investors, Glassnode revealed that the number of active addresses and entities has trended downward since November 2021, implying that new and existing investors are not interacting not with the network.
Address activity has grown from over 1 million daily active addresses in November 2021 to around 870,000 per day over the past week. Likewise, active entities, a collation of multiple addresses belonging to the same person or institution, are now around 244,000 per day, which Glassnode says is around “the lower end of the typical ‘low activity’ channel.” bear markets. »
“A retention of HODLers is most evident in this metric, as active entities typically trend sideways, indicating a stable user base,” the analysts added.
New entity growth also dipped to bear market lows from 2018 to 2019, with bitcoin’s user base reaching 7,000 net new entities daily.
The number of transactions remains “stagnant and lateral”, indicating a lack of new demand but also means that incumbents are being held back by market conditions.
See also: Institutional Investors Shorting Bitcoin Make Up 80% of Weekly Flows.
To back up their point, Glassnode concluded that the number of addresses with non-zero balances, i.e. those holding at least some bitcoin, continues to reach all-time highs and currently sits at more than 42.3 million addresses.
Past bear markets have seen a purging of wallets as the price of bitcoin crashed. Yet, with this metric indicating otherwise, Glassnode says it shows an “increasing level of determination among the average Bitcoin participant.”
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