Bitcoin has been hit by bears for the third consecutive week. At the time of writing, BTC has lost two important support areas at $35,000 and $32,000. The first cryptocurrency by market capitalization is trading at $31,987 with a 10.5% correction on the daily chart.
The general sentiment in the market appears to be bearish, as BTC failed to gain a solid foothold in the high territory around current levels. a Report By Arcane Research the latest correction concluded after a week of lower exchange activity, a drop in on-chain activity, and “futures premiums are almost gone”.
Research estimates that on-chain activity has declined by about 69% since the beginning of May and the end of April. As a result, The BTC network fee has also fallen by about 93%, as shown in the chart below.
Average daily transaction in The Bitcoin network went from $62 in April to $4.38 at the beginning of June. At the same time, the 7-day average mempool transaction has reached its lowest level since April 2020, as determined by Arcane Research.
This coincided with the mining sector increasing bitcoin sales. After China placed new restrictions on the sector for certain large-scale BTC mining activities, some miners were forced to move their operations. Therefore, it seems logical that they sold part of their holdings to get cash for expenses.
Lex Moskovsky, CIO of Moskovski Capital, He said About 8,545 BTC left miners’ wallets in the past four days. Increased selling pressure contributed to the recent crash.
Long-term holders of Bitcoin seize the opportunity to buy
Where some see fear, chaos, and chaos, others see opportunity for accumulation. data From Glassnode notes that the total supply of Bitcoin held by long-term holders of the coin has increased after hitting a plateau during March 2021.
As shown in the chart below, the rally in these metrics became parabolic as of mid-May when the price of BTC took its worst hit. These investors bought more than all the Bitcoins that short-term investors sold. Analyst William Clemente believes that this number is around 217,194 BTC. Clemente said:
Selling from short-term owners used to offset long-term buying, but now long-term owners buying offset short-term selling.
Additional data recorded by Glassnode indicates that 744,000 BTC has been withdrawn from exchanges to cold wallets since March 2020, when the price of BTC dropped to $3,000.
During the month of May and part of June 160,700 BTC returned from this supply to the market. Although it’s a significant increase, it’s only 22% of the total that went cold. Analyst Checkmate believes this sale is a change in the conviction of a segment of the market.
The fact that long-term holders of bitcoin are accumulating 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 shown in the fractal below, after the initial distribution in early 2021, long-term holders can continue to accumulate while the price moves sideways or heads down. The analyst added:
This fractal describes the inflection point where LTHs stop spending, begin to re-accumulate and accumulate what are now considered cheap coins.