on the crypto
According to Glassnode, bitcoin is slowly recovering from a recent market slowdown and China's crackdown on mining.
While Bitcoin has been stuck in a somewhat tight price corridor in recent weeks, several key metrics are now indicating an overall positive trend, according to the latest weekly report released by cryptographic metrics platform Glassnode.
“It [last] week opened to a high of $ 35.128 and dropped to a low of $ 32.227. It's starting to feel like the calm before the storm, as silent activity appears in both spot, derived and blockchain metrics, ”the Glassnode researchers noted.
BTC miners recover from China's ban
Glassnode pointed to the first signs of recovery in Bitcoin's hash rate following China's crackdown on BTC mining, which forced local mining pools to go offline or move overseas. The speed at which the computing power of the Bitcoin network returns could determine whether the overall market sentiment is bearish or bullish, the researchers noted.
According to the report, Bitcoin's hash rate, the total computing power dedicated to the network, has somewhat recovered from its recent peak 55% drop to a 39% drop. If the metric remained at this level, it would mean that nearly a third of the hash power that was affected by the Chinese crackdown is back online.
If the hash rate resets quickly, it could mean that a significant number of miners have successfully relocated and / or relaunched their hardware. By extension, this could also reduce the selling pressure, as those miners would be able to profit again and wouldn't bother liquidating their earnings.
At the same time, the total net position of active miners in Bitcoin is growing again, which means that they are increasing their holdings in BTC at a high enough rate to offset the sales conducted by offline miners.
Bitcoin exits exchanges again
Another indicator of Bitcoin market sentiments is whether BTC is predominantly deposited in exchanges or withdrawn from them. Essentially, the more BTC users move to exchanges, the more likely they are to sell their coins and vice versa.
In May, when Bitcoin was still trading at nearly $ 60.000 (quotation BTC), we have seen "the inexorable depletion of reserves of trading currencies, with many of them en route to the Grayscale GBTC Trust, or accumulated by institutions".
However, after the price of BTC plummeted by around 50% in the past couple of months, users began depositing their Bitcoins on trading platforms in bulk, likely to sell them during the decline, or at least to prepare for it.
BTCs move
“Throughout May… a wave of BTC was deposited on exchanges, along with the market selling around 50%,” Glassnode pointed out. “On a 14-day moving average, the last two weeks in particular have seen an increase in positive return on exchange outflows, at a rate of ~ 2k BTC per day.
As Bitcoin's volatility is scaling back, more and more BTC holders are withdrawing their coins from exchanges without the looming threat of a panic sell. Therefore, "executed trades tend to represent a less speculative and more 'intentional' sample than a bubbling bull market".
