The latest Bitfinex Alpha Report shows that while Bitcoin addresses with a non-zero balance hit a new record high, the number of active addresses and daily transactions has declined.. While these are not bearish indicators, they do suggest an unsettling and transitional situation in the market.
In addition, the recent behavior of the Bitcoin’s price has re-correlated it closely with the S&P 500, raising questions about its vulnerability to macroeconomic headwinds and poor cryptocurrency market liquidity. it also raises concerns about increased price volatility and market stability.
On-chain analysis shows that although the number of Bitcoin wallets with a non-zero balance has reached a new record, key on-chain metrics suggest possible market weakness.
Addresses with non-zero BTC balance
The report highlights that the seven-day moving average of the number of active addresses interacting with the Bitcoin network on a daily basis recently fell to its lowest level since late January and the number of daily transactions on the Bitcoin network also dropped sharply. While these are not conclusive indicators in terms of bullish or bearish signals, they suggest indecision and a troubling situation for both bulls and bears.
Seven-day moving average of daily active addresses on the Bitcoin network
On the other hand, open interest and trading activity for equity options markets BTC and Ether on the CME have continued to accelerate, with both contracts hitting a new all-time high for open interest on March 27.. This indicates an increase in institutional trading activity.
CME Group Bitcoin and Ether Options Open Interest and Average Daily Trade Value
In summary, the current situation in the cryptocurrency market calls for caution against excessive leverage or increased risk appetite during this transition period. While there are some metrics that suggest optimism, there are others that show weakness, so it’s important to watch for signs and keep a balanced outlook amid uncertainty.
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