On-chain activity on the Bitcoin network still appears to be in a bear market, with U.S. and EU buyers struggling to stay ahead of Asian sellers.
The latest report on the weekly activity of the Bitcoin (BTC) network by blockchain analytics firm Glassnode shows that the price of Bitcoin has remained stable within a tight $5,000 range between $37,680 and $42,312. However, on March 22, Bitcoin’s price suddenly spiked, pushing the price to a two-week high.
According to Glassnode’s weekly commentary, overall, the Bitcoin network is in a clear state of stagnation:
“Bitcoin network utilization and on-chain activity remain in bear market territory, albeit recovering.”
This study concluded that there are clear differences in the behavior of ordinary BTC investors based on geographic location. Notably, US and EU investors tend to be buyers, while Asian investors tend to be sellers. This trend has been consistent since March 2020, except last November when both parties were buying in bulk.
Specifically, Glassnode researcher and report author "Checkmate" noted that U.S. and EU investors have provided broad support over the past two years, buying heavily during late 2020 and early 2021, while "these two regions have seen strong growth throughout May to early 2021." surrendered in July". Currently, EU buyers offer the most support.
During this #Bitcoin drop, buying pressure was mostly concentrated during US and EU trading hours.
Meanwhile, most of the sell-side pressure occurred during the Asian session, suggesting divergence in regional strategies.
— glassnode (@glassnode) March 21, 2022
Instead, Glassnode reports that Asian markets generally offer lower buying support through Q1-Q3 2021, which is currently generating significant selling pressure. However, on March 22, Su Zhu, co-founder of crypto investment firm Three Arrows Capital, tweeted “Asia’s highest bid for BTC,” suggesting that the day’s short-term price rise was led by Asian traders.
Some on-chain indicators suggest that the bear market has begun. The number of new entities (or new wallets unrelated to existing wallets) has been on the rise since mid-2021. This is a bear market pattern that ran from January 2018 to the first half of 2020. Currently, the Bitcoin network is adding approximately 110,000 entities per day.
In a bear market, new entities grow slowly and steadily. During bullish periods, the growth of new entities experienced massive increases like January 2018 and January 2021.
The volume of transfers worth more than $1 million has continued to trend down sharply since peaking in November last year. Glassnode warned that “serious drops could indicate a decrease in network utilization,” further suggesting we have entered a bear market.
As reported last week, long-term holders (LTH) have seen increased selling pressure, but overall LTH supply remains stagnant as an equal proportion of short-term holders (STH) supply has converted to LTH and the trend remains continued. The LTH supply consists of tokens that have not moved for at least 155 days.
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