Things have been looking a bit shadowy in the cryptocurrency industry, with Bitcoin declining almost by 50% since the period of all-time high as of November 2021. Although there are precise trends that indicate a shift is in view.
Bitcoin is presently on to its 12th week of the principal reduction since the all-time high, and traders of derivatives are staking on the cryptocurrency’s further downwards movement. However, the on-chain demand sample points out that an additional Bullish hint is in play, as reported by on-chain strategist, Glassnode.
Glassnode had written in the newsletter of the week, stating that, as a fragment of the Bitcoin trade cap, open interest in endless swaps seem to hover about 1.3%, and this is a historical high which also is a pointer to the wind-down event.
Perpetual Swap Markets With Short Bias
Funding prices have, at the same time, traded negatively for the significant part of January, which shows the presence of a short bias in the perpetual swap market.
Such gloomy trends can also be identified in options markets, having a high put or call rate of 59% for several months. This is a pointer that traders made movements towards purchasing downside insurance.
Observing the demand aspect of the market, the number of Bitcoin wallets that have non-zero balances is on the rise. The present trend of the non-zero wallet index seems to be extensively unmoved by the previous three months of declined prices, having the wallet count hit a recent all-time high of 40.16 million addresses.
Retail Wallets Unbothered About The Correction
Although the Bitcoin market cost has experienced a decline for the previous week, retail size wallets, which are wallets having lower than one BTC, seem to appear unbothered by the correction, as supplies held in the wallets keep climbing.
Bitcoin having a history of being a grassroots structure basically speaks to an upcoming set of “sat stackers” that still stands despite any market situation.
One more trend on the positive aspect is that the funds are heading in the direction of illiquid wallets. A little more than 0.27% of the supply, which is about 51,000 bitcoins, was transferred from a liquid into an illiquid state, as reported by Glassnote.
Held On Reserve Exchanges witnessing Multi-year Lows
Due to the pace at which funds are being moved, the entire reserves held on exchanges have experienced a decline to multiyear lows, meeting up to 13.27% of the supply in circulation.
There is a bit of difference from how funds were moving as at the May – July 2021 drawdown in which, over about 164,000 BTC or about 0.84% of the supply in circulation made flows into the exchanges, accompanied by a drop in illiquid supply summing up to 1.5% of circulating supply.
Settlement Floor Worth Keeps Growing
In addition to the aforementioned bullish trends during the period of both the May- July and the present drawdowns, the settlement worth dropped majorly from the preceding peaks. Meanwhile, the floor value has kept on growing even amidst bearish trends. It talks of a well-sustained as well as advancing use of Bitcoin.
In addition, the settlement volume shifts from transactions that are retail-sized (lower than $100,000) to institution-sized worth, as well as high net value.
