According to Glassnode data, market tourists or short-term holders have left the digital currency market and long-term holders are accumulating bitcoins.
The number of addresses, entities and active transactions on the Bitcoin network reflects the current state of uncertainty in the cryptocurrency market. The number of wallets that contain at least one digital asset continues to increase.
Read more: Bitcoin in 2022
Short-term holders exited the market
According to data from blockchain analytics company Glassnode, “market tourists” or short-term holders have left the digital currency market, leaving only long-term holders. In its on-chain report on July 4 (July 13), Glassnod pointed out that June saw one of the worst performances of Bitcoin in the last 11 years. This month, the largest cryptocurrency in the market lost 37.9% of its value. The current activity of the Bitcoin network matches the peak levels of the bear cycle in 2018 and 2019. Golsnod further stated:
The Bitcoin network is approaching a situation where almost all institutions and market tourists are leaving the market completely.
Despite short-term holders exiting the market, the number of “shrimps” or investors holding less than one bitcoin and whales, or investors holding between 1,000 and 5,000 bitcoins, has increased significantly, Glassnod believes.
The increase in the number of shrimps in the cryptocurrency market!
Crypto market shrimps find the current price of Bitcoin attractive. On average, these people add about 60,500 bitcoins to their holdings per month. According to Glassnod, this amount of Bitcoin accumulation is the most intense amount of buying in history. Prawns currently buy about 0.32% of the total Bitcoin supply per month.
According to Glassnode, the number of active addresses and entities has been decreasing since November 2021 (Aban 1400). This means that existing investors and new investors do not interact with the network in the same way. Wallet activity has decreased significantly since November last year. In November 2021, there were about one million active addresses per day, but now this number has decreased to $870,000 active addresses per day.
The growth of new active units has reached its lowest level compared to the downward cycle of 2018-2019. 7000 units and new entities are added to the Bitcoin user base every day. There is no particular change in the number of transactions compared to previous bearish cycles. This issue shows the lack of new demand and the desire of the holders to preserve capital in the current market conditions.
In part of its report, Glassnode points out that the number of non-zero Bitcoin addresses, that is, addresses that hold at least some Bitcoin, continues to grow. There are currently 42.3 million addresses with Bitcoin balances in the world. These data show that unlike short-term holders’ reluctance to participate in the market, long-term holders still believe in the future of the cryptocurrency market.
In previous bear cycles, when the price of Bitcoin fell, wallets also emptied their balances. In the current cycle, the opposite is true. According to Glassnod, the collected data indicates a high level of determination and belief in the strength of the cryptocurrency market among long-term holders.
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Source: cointelegraph