Declined Bitcoin Activities Shows Longer Bearish MarketAugust 2, 2022
Bitcoin prices displayed a relatively strong rebound over the last few weeks. It increased by an average of 15%. Data shows that it would require more demands on the network for the price to be sustained and increase further.
Crypto Analytic Perspectives
Glassnode has said that available data around Bitcoin points to the reality that it is still within the bearish zone. For the latest price recovery to continue, the network has to experience more demand than what it currently has.
Glassnode’s assessment of the Bitcoin network in the past week was a mediocre one. The blockchain analysts revealed this in its latest report, The Week On Chain, published on the 1st of August.
In the report, the firm’s analysts showed that Bitcoin has had a sideway growth in its demand transactions. It also showed that active Bitcoin addresses are still in a downward position. Also, reduced transaction fees are managing the excitement with investors as Bitcoin gained 15% in the last couple of weeks.
But Bitcoin has 2% in the last 24 hours as it now trades at $22,899 as CoinGecko has reported. The Glassnode report started by explaining the qualities of a bearish market and it includes a drop in activities on the chain. The market also moves from speculative investors to long-term asset holders.
The report indicated that the Bitcoin network is still displaying every bit of the bearish market traits. Glassnode wrote further that a decreased network activity might translate to a lack of fresh demands from speculative investors ahead of long-term holders. There is, in essence, no demand from investors who are highly convinced of the network’s tech.
The report said that there were just a few notable spikes in the course of the major capitulation. The network’s activities have indicated very little inflow of new demands.
Consolidation at the Recent Floor Price
In contrast, there was a significantly high demand that was established at $20,000 and it created a floor price. But there was no extra demand that would be needed to sustain another round of price increases.
Glassnode called the reduced activities on addresses a low bearish market demand profile. And it has been the state of affairs for the network since December 2021.
The analysis said there is a similarity between the present demand pattern on the Bitcoin network and that of the period between 2018 and 2019. In a similar fashion to the previous time, demand fell after the all-time high in April 2021. The was a recovery that followed it in November as the price reached a new all-time high.
But demand has been declining since last November. It experienced a major dip when there was a sell-off in the month of May.