Network Activity Reveals Bears Are Still in Control of Crypto Markets
- Transactions, address activity, and network fees are still in bear market territory.
- Bitcoin is trading at crucial support levels, and demand appears to be limited.
- News of an attack on Solana has sent SOL prices plummeting.
Bitcoin and crypto markets have been in retreat since their seven-week high over the weekend, and on-chain activity indicates that bears still have a lot more energy.
Around $50 billion has left the crypto asset space since the weekend. Markets have been in retreat this week, with total capitalization falling below $1.1 trillion yesterday.
Since the big slump in mid-June, crypto markets have been range-bound, with resistance proving too strong to overcome. On-chain analytics provider Glassnode has reported that the bears are still firmly in control of the market.
Attention now turns to whether this is a bear market rally, or whether the fundamentals are following through in support.
Read more in The Week On-chain 👇https://t.co/taOkbeVlyv
— glassnode (@glassnode) August 1, 2022
Bear Relief Rally
According to Glassnode, which delved into Bitcoin (BTC) network data in its weekly report, “current network activity suggests that there remains little influx of new demand as yet.”
The firm analyzed network transactions, address activity, and fees which are usually a good indicator of demand for Bitcoin and its brethren.
It noted that, despite the recent rally to $24K, these trends have been in decline, which indicates that we are “firmly within bear market territory.” Bitcoin is currently trading at $22,880, which is right on the 200-week moving average. This indicator has been the market bottom and solid support in the previous two bear markets though prices have dipped below it.
Another market bottom indicator is the Realized Price, which is a measure of Bitcoin the value of all coins in circulation at the price they last moved, or an approximation of what the entire market paid for their coins. BTC Realized Price is currently $21,807, according to charting website Woo Charts.
Observing the past month of consolidation, Glassnode stated that only a “stable base of higher conviction traders and investors remain.” These have been slowly accumulating, but there has been no new demand to drive prices higher.
Considering the current state of the global economy, this scenario is likely to remain for some time. Only when inflation is under control, and retail traders and investors have more cash for high-risk assets will demand for crypto increase.
Crypto Cool Down
Markets have been in retreat since the seven-week high over the weekend. Bitcoin is flat on the day though Ethereum (ETH) has made marginal gains of 2.6% to top $1,600 during the Wednesday morning Asian trading session.
Solana (SOL) has seen the biggest drop of 4% as news of an ecosystem attack is currently breaking.
There's an ongoing attack targeting the Solana ecosystem right now. 7000+ wallets affected, and rising at 20/min. Because it's very early and the attack is ongoing, there's a lot of misinformation and speculation. So here are a few thoughts and clarifications.
— Emin Gün Sirer🔺 (@el33th4xor) August 3, 2022