Cryptocurrency News

Bitcoin Miner Mayhem, On-Chain Fees Drop 90% in Two Months

Bitcoin has been hit by bears for the third week in a row. At the time of writing, BTC has lost two important support areas at $35,000 and $32,000. The first cryptocurrency by market cap traded at $31,987 with a 10.5% correction on the daily chart.

receive btc Bear Attack on 24 hour chart. Source: BTCUSD Tradingview

The general sentiment in the market seems to be bearish, as BTC has failed to gain a strong foothold in the higher region around current levels. a report good A recent correction was concluded by Arcane Research, with less exchange activity after a week, a decline in on-chain activity, and “the futures premium is almost gone”.

Research estimates that on-chain activity has declined by about 69% since the beginning of May and the end of April. the resulting, As seen in the chart below, BTC network fees have also dropped by around 93%.

bitcoin btc btcusd
Source: Mysterious Research

average daily transactions Bitcoin’s network has risen from $62 in April to $4.38 in early June. At the same time, 7-day average mempool transactions hit its lowest level since April 2020, as determined by Arcane Research.

This coincided with the mining sector increasing its BTC sales. After China imposed new limits on the region largely for some BTC mining activities, some miners were forced to relocate their operations. Therefore, it seems logical that they sold part of their holdings to obtain liquidity for expenses.

Lex Moskovsky, CIO at Moskovsky Capital, said That in the last 4 days about 8,545 BTC have left the wallets of the miners. An increase in selling pressure has contributed to the recent crash.

bitcoin btc btcusd
Source: Glassnode via Lex Moskowski

Bitcoin Long Term Holders Seize Buying Opportunities

While some see fear, devastation and chaos, others see an opportunity to accumulate. data Glassnode shows that the total bitcoin supply held by long-term holders is increasing after reaching a plateau during March 2021.

bitcoin btc btcusd
Source: Glassnode via William Clemente

As can be seen in the chart below, the rise in these indicators turned parabolic until mid-May when the BTC price was hit hardest. These investors bought more than all the BTC supply sold by short-term investors. Analyst William Clemente believes the number to be around 217,194 BTC. Clemente said:

Selling from short-term holders was offsetting buying from long-term, but now buying from long-term holders is offsetting selling from short-term holders.

Further data recorded by Glassnode indicates that 744,000 BTC have been withdrawn from exchange platforms to cold wallets since March 2020, when the price of BTC fell to $3,000.

During May and June 160.700 BTC of this supply has returned to the market. Although a significant increase, it represents only 22% of the total supply that has cooled. Analyst Checkmate believes that this sell-off is a change in conviction by a segment of the market.

The fact that long-term holders have returned to hoarding bitcoin is a bullish sign, but the analyst believes there may be parallels between this behavior and the accumulation period in 2018. Bear Market.

As seen in the fractal below, long-term holders may continue to accumulate after the prologue distribution in early 2021 while the price moves sideways or down. The analyst said:

This fractal describes the inflection point where LTH stops spending, starts accumulating again and is now considered a cheap coin.

Source: Glassnode Insights

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