The current upward trend for bitcoin (BTC) didn’t attract a brand new wave of active users, while exchange flows also advise a “relatively lacklustre increase of capital,” the on-chain analytics firm Glassnode finds.
Writing within the latest issue of A Few Days On-chain report, Glassnode’s analysts described the possible lack of interest from new bitcoin users throughout the rally between late June and early August among the primary reasons for “weakness and subsequent rejection from the cost from [USD] 24.4k back underneath the Recognized Cost.”
The failure to draw in new active users was “particularly noticeable among retail investors and speculators,” the report added.
Bitcoin’s Recognized Cost is the need for all circulating coins in the cost these were bought, divided by the amount of coins in circulation, and it is frequently regarded as the break-even cost for that average bitcoin investor. The Recognized Cost presently is around USD 21,700.
Further within the report, Glassnode also pointed to switch flows as the second manifestation of fundamental weakness within the Bitcoin market right now. Based on the report, the monthly momentum of exchange flows has become signaling only lackluster interest from investors.
“Exchange flows have finally declined to multi-year lows, coming back to late-2020 levels. Like the retail investor volumes, this means an over-all insufficient speculative curiosity about the asset persists,” the report stated.
It added the cost rally that adopted the June bottom within the Bitcoin market “was not supported with a significant increase of speculators in to the market,” which signifies the rally had “little substance behind it from your on-chain perspective.”
To conclude, Glassnode noted the current structure from the Bitcoin marketplace is “certainly comparable using the late-2018 bear market.” However, additionally, it cautioned the market “does not possess the macro trend reversal in profitability and demand inflow needed for any sustainable upward trend.”
At 9:15 UTC on Wednesday morning, BTC was buying and selling at USD 21,352, lower under 1% per day and nearly 11% per week.
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