The going has not been good enough in the last few days for the world’s leading cryptocurrency, Bitcoin, as the on-chain activity data shows consistent losses for holders, making them more likely to dump their tokens to buyers.
According to cryptocurrency and blockchain analysis firm, Glassnode, there is a chance of a bearish market trend for Bitcoin. The on-chain analysis points to an imminent increase in the token’s selling. From the analysis, Glassnode affirmed that the selling was a result of pressure due to the ongoing bearish trend of Bitcoin.
The analytics report released by Glassnode on February 21 shows how Bitcoin bulls face an increasing bearish market scenario, which is not a healthy thing even for buyers. According to the report, the general shortcoming experienced in the mainstream crypto market reflects wider issues like the imminent Fed rate hike, the conflict in Ukraine, and the mass unrest in Canada.
The report further revealed that if the price slump continues, the chance of an even more intense bearish trend will be the likely outcome. Bitcoin at present is trading below 47%, way down from the November trading volume, and has continued to lose its value regularly in the last couple of weeks.
The On-Chain Metric
The absence of any sustained on-chain action is one of the earliest indicators of a potential bearish market. As a result, the combined number of active wallet addresses lies at the lowest level of the bear market track, which represents the on-chain activities in a downward spiral, implying a decline in interest and demand. That is, both the buying and selling are at their lowest level.
Active on-chain activities. Source: Glassnode
According to Glassnode, a total of 219,000 wallet addresses have been cleared, implying a negative signal about what the users think of the token. A hundred and above users clearing their addresses points to a significant outflow of users from the Bitcoin network.
For instance, if the value of Bitcoin is $47,200, users still holding the token will accrue an average loss of 22%. The longer they hold on to their assets, the bigger the loss and the greater the likelihood of selling the assets at a discounted price. Users are in a no-win situation.
Outside of Glassnode’s analysis, several long-term and short-term on-chain standings concluded that there are 4.7 million Bitcoin tokens presently amid the uncertainty, and about 54.5% of them belong to short-term owners who, statistically speaking, are more inclined to expend them.
Bitcoin Price Review
At the time of going to press, the price of BTC is down by 6% in the last 24 hours and is now trading at $36,738, as reported by CoinGecko. The token is currently at its lowest level, just a little above $35,000 since January.
Cointelegraph reported positive news, which points to a ray of hope for the BTC community. As of February 19, over 60% of BTC has been unspent for more than a year, making inactive coin supply a boost to BTC’s recovery.