Bitcoin’s on-chain activity appears to remain in a bear market as US and EU buyers are struggling to stay ahead of Asia-based sellers.
Blockchain analytics firm Glassnode’s latest report on weekly Bitcoin (BTC) network activity shows that the price of the largest cryptocurrency by market cap has remained firmly within the same tight $5,000 range, between $37,680 and $42,312. However, on March 22 the asset experienced a rally that pushed prices to a two-week high.
In general, the network is demonstrably calmAccording to Glassnode’s weekly review:
“Bitcoin network utilization and on-chain activity remains firmly in bear market territory, although it is recovering.”
The research concluded that there is a clear difference in the behavior of the average BTC investor based on their geography. In particular, investors based in the US and the EU have tended to be buyers, while Asian investors have tended to be sellers. This trend has remained constant since March 2020with the exception of last November, in which both parties bought strongly.
Specifically, the Glassnode researcher and writer of the “Checkmate” report noted that US and EU investors have offered broad support for offerings over the past two years, with heavy buying in late 2020 and early 2021, while “both regions capitulated throughout May-July .” EU buyers currently offer the most support.
Over the course of this #bitcoin drawdown, buying pressure has been mainly during US and EU trading hours.
Meanwhile, the majority of sell-side pressure has occurred during Asian market hours, suggesting a divergence in regional strategy.
Read morehttps://t.co/cyTLZGHR1u pic.twitter.com/mJGGloo1t4
— glassnode (@glassnode) March 21, 2022
Over the course of this bitcoin slide, the buying pressure has mostly come during US and EU trading hours. Meanwhile, most of the selling pressure has come during Asian trading hours, suggesting a divergence in regional strategy. Read more here: https://t.co/cyTLZGHR1u pic.twitter.com/mJGGloo1t4
In contrast, Glassnode reported that Asian markets have generally offered less buying support during the first quarter of 2021 and are currently producing strong selling pressure. However, on March 22, the co-founder of cryptocurrency investment firm Three Arrows Capital, Su Zhu, tweeted “Asia unionically max bidding BTC”, suggesting that the day’s short-term price rally was led by Asia-based traders.
Various on-chain metrics suggest that the bear market is underway. The number of new entities – or new wallets that are not associated with existing wallets – has been on a gradual increase since mid-2021. This is a bear market pattern that played out in a similar fashion from January 2018 through the first half of 2020. There are currently about 110,000 new entities created on the Bitcoin network per day.
In a bear market, the growth of new entities increases slowly and steadily. In bull periods, the growth of new entities experiences large spikes, such as in January 2018 and January 2021.
Transaction volumes for transfers valued at more than $1 million have followed a steep downward trend since the peak last November. Glassnode warned that “a severe decline may signal a reduction in network utilization,” further indicating that we have entered a bear market..
As reported last week, long-term holders (LTH) have increased selling pressure, but overall LTH supply has remained stagnant because an equal proportion of short-term holders (STH) supply has converted, and that trend continues. The LTH supply consists of coins that have not moved for at least 155 days.
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