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As the United States and European Union buyers struggle to keep up with sellers based in Asia, it appears that Bitcoin’s on-chain activity is still in a bearish market.
Glassnode, a blockchain analytics firm, has released its latest report on the week’s activity of the Bitcoin ( BTC). It shows the price of the largest cryptocurrency by market capital has remained within the same tight $5,000 range of $37 680 to $42,312. However, prices rose to a new high on Tuesday due to an abrupt spike in the asset’s price.
According to Glassnode, the network is experiencing a show of weakness.
“Bitcoin’s network utilization and onchain activity remain in bear market territory, even though they are recovering.”
According to the research, there is a marked difference in the behavior and location of average BTC investors. It is notable that investors based in the U.S. and EU tend to be buyers while Asian investors tends to be sellers. This trend has been consistent since March 2020, with the exception of November last year when both sides were buying heavily.
Glassnode researcher “Checkmate”, a report writer for Glassnode, pointed out that U.S. investors and EU buyers have provided general bid support over the past two year with heavy buying in the late 2020s and early 2021s, while “both areas capitulated during May-July.” The largest amount of support is currently being offered by EU buyers.
During this #Bitcoin drawdown buying pressure was primarily during US and EU trading hours.
The majority of sell-side pressure occurred in Asian market hours. This suggests a divergence between regional strategies.
Read morehttps://t.co/cyTLZGHR1u pic.twitter.com/mJGGloo1t4
— glassnode
March 21, 2022
Glassnode, however, reported that Asian markets generally offer lower buying support during Q1-Q3 2021 and are currently under heavy selling pressure. However, on Tuesday, Su Zhu , co-founder and CEO of cryptocurrency investment firm Three Arrows Capital, tweeted that “Asia ironically max bidding BTC,” suggesting the short-term price rise was driven by Asia-based traders.
A number of on-chain metrics indicate that there is a bear market. Since mid-2021, the number of new entities or wallets that aren’t associated with existing wallets has been steadily increasing. This bear market pattern has been similar from January 2018 to the first half 2020. Each day, approximately 110,000 new entities are created on Bitcoin.
New entity growth is slow and steady in bear markets. New entity growth is high during bullish periods. This was evident in January 2018 as well as January 2021.
The steep decline in transaction volumes for transfers exceeding $1 million has continued since November’s peak. Glassnode warned that “a severe fall may signal a decrease in network utilization,” further indicating we are in a bear market.
Related: Bitcoin could easily reach $30K with stocks due to 30% drawdown by 2022 — Analyst
Last week’s report stated that LTH holders have increased selling price. However, the overall supply of LTH has remained static because an equal amount of STH holders (short-term holders) has converted. This trend is still in force. LTH is a supply of coins that haven’t moved in the last 155 days.
