Cryptocurrency bear markets are notorious for being painful, but the month of June was especially difficult for crypto fans, as a confluence of factors sent the price of Bitcoin (BTC) down 37.9%, its worst monthly performance yet. since 2011.
As a result of continued widespread weakness, most of Bitcoin’s so-called “tourists” have left the space, leaving only the most dedicated incumbents, according to blockchain analytics firm Glassnode.
Despite Bitcoin’s ongoing struggles and the fact that cryptocurrency traders are currently experiencing the worst bear market in the sector’s history, several metrics suggest that the outlook is not as dire as some are predicting and that the of the cryptocurrency market remains strong.
Increase the number of dedicated hodlers
A significant purge of active Bitcoin portfolios is a common occurrence during major sell-off events, as well as early bear markets, according to Glassnode. However, the severity of the exodus has lessened since the 2018 bear market, indicating “there is a growing level of resolve among the average Bitcoin participant,” Glassnode said.
During the most recent reduction in the number of addresses with a non-zero balance, only 1% of Bitcoin addresses purged their holdings entirely, compared to 2.8% between April and May 2021, and a whopping 24% who did the same between January and March 2018.
While Bitcoin on-chain activity remains muted and solidly in bear market territory, the most dedicated Bitcoin holders continue to hold the line, and likely will continue to do so until the market turmoil subsides and a bottom is established in the market. BTC price.
A return to Bitcoin best practices
The “if it’s not your keys, it’s not your crypto” ethic is gaining ground in the community again, as traders have been withdrawing their tokens from exchanges at a frantic pace. The collapse of the Terra ecosystem, the possible insolvency of Celsius, and the implosion of Three Arrows Capital have all served as a stark reminder that cryptocurrencies are meant to be stored offline.
Since March 2020, the number of Bitcoin held on exchanges has decreased from 3.15 million to 2.4 million. That’s a total outflow of 750,00 BTC with 142,500 of that total occurring in the last three months.
With platforms like Celsius halting withdrawals and smaller exchanges beginning to place limits on the amount users can withdraw, the desire to regain personal control of crypto assets has become a top concern for holders.
This can actually be seen as positive for prices in the long run, as the likelihood of further capitulations decreases when tokens are stored cold and cannot be easily sold on exchanges.
Retail begins to gain interest
Another encouraging development amid Bitcoin’s worst month in history is the growing interest from wallets holding less than 1 BTC, which likely represent the retail cohort of the cryptocurrency market.
These so-called “shrimp” wallets have been greedily picking up low-priced Bitcoin worth 60,460 BTC a month, according to Glassnode, which is “the most aggressive pace ever.”
Even with cryptocurrency in a bear market, several underlying metrics including a dedicated cohort of crypto hodlers and growing interest from smaller retail buyers. suggest that calls for the death of Bitcoin are once again premature.
oh look, #bitcoin balance on exchanges still dropping…
Some people understand that there will only ever be 21 million $BTC. They are getting their piece of the foot. pic.twitter.com/NSVBJicjZo
— Lark Davis (@TheCryptoLark) July 5, 2022
Oh look, the balance of bitcoin on exchanges keeps falling…
Some understand that there will only be 21 million BTC. They are getting their share of the pie.
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