Between rising inflation, fear of a recession, the return of Covid, the war in Ukraine, and the relentless supply chain disruptions, the global markets are in a state of fear, and are assuming defensive positions.
This has also reflected on the Bitcoin (opens in new tab) blockchain, whose activity has “reduced modestly” over recent weeks, according to a new report by Glassnode. The on-chain market intelligence firm says network activity is now at levels similar to those occurring during the “deepest bear phase” in 2018 and 2019.
“It appears that a near complete purge of market tourism has taken place,” Glassnode said in a report (opens in new tab).
Whales and Shrimps keep stacking
But declining blockchain activity is not the only argument that “casuals” have almost entirely abandoned the cryptocurrency market. It also says that die-hard Bitcoin fans remain in high conviction, as exchange balances are draining at “historically high levels”, while both Shrimps and Whales are increasing their positions “meaningfully”.
“Whales” are entities (individuals or companies) with large bitcoin holdings, while “Shrimps” are those striving to become Whales.
This year, the cryptocurrency market has been going through a full-blown crypto winter. The bear market is in full swing. Since November 2021, when the price of Bitcoin hit an all-time high of around $69,000, it’s been nothing but downhill since then.
At one point, the price recorded eight straight weeks of price declines, something that’s never happened in the token’s history.
The Terra/Luna collapse, Three Arrows Capital fiasco, followed by the Chapter 11 bankruptcy of Voyager, Vauld being acquired by Nexo, Celsius suspending withdrawals, have all done nothing but instill more fear in the market, and pushed the price of bitcoin even further down.
At one point, the cryptocurrency fell to $17,000, below its previous all-time high of around $19,000, something that also, never happened before.
In the last two days though, it has gained some ground, rising by almost 10%, to $22,000. Whether this signals a trend reversal, or if it’s just a “dead cat bounce”, remains to be seen.