06.12.2021

The cryptocurrency market is on the verge of high turbulence

The volatility in the bitcoin market   and in the entire crypto market in general has left much to be desired lately. The BTC price is squeezed in a narrow price range and has not shown any significant movements for a long time. Probably, this is due to seasonality – business activity traditionally decreases in summer.

  • The volatility in the bitcoin market has dropped to its lowest levels.
  • The hashrate of the Bitcoin network began to recover.
  • Miners started accumulating BTC.
  • Over the past two weeks, users have been actively withdrawing BTC from crypto exchanges.
  • Derivatives market activity declined.
  • Glassnode believes there is now a calm before the storm.

At the same time, Glassnode analysts  believe that the current situation in the crypto market is the calm before the storm. In their opinion, there are several indicators that indicate a positive trend.

Translation:

“We analyzed the on-chain data and submitted a report on:

  • Dynamics of changes in the mining market
  • Changes in the derivatives market
  • Dynamics of movement of coins in the blockchain “

First of all, Glassnode is paying attention to early signs of recovery of the hashrate of the Bitcoin network . The speed with which miners are returning to their operations may indicate the general sentiment in the market.

After reaching a local minimum at 68 Ehash / s, the hash rate of the first cryptocurrency has recovered by almost 30%. Now it is 97 Ehash / s.

Hashrate of the first cryptocurrency

The high rate of hash recovery indicates that many Chinese miners have already completed the migration and have begun to connect their equipment to the network. This, according to Glassnode, relieves some of the selling pressure from the bitcoin price, because miners no longer have to worry about having to sell coins quickly to lock in profits.

At the same time, Glassnode draws attention to the fact that miners have started accumulating BTC .

Bitcoin miners' net position

Another indicator is the withdrawal of BTC from crypto exchanges . Here the logic is as follows:

  • If the amount of BTC on the addresses of crypto-exchanges increases, this indicates that users are actively starting their cryptocurrencies for further sale.
  • If the amount of BTC on crypto-exchange addresses decreases, then users are withdrawing BTC for long-term holding.

“Throughout May, when bitcoin was gradually falling in price, we saw an active inflow of BTC to crypto exchanges. However, over the past two weeks, users have withdrawn an average of 2,000 BTC per day, ”the experts write.

Activity in the derivatives market ( options and futures ) is also declining. After a series of mass liquidations that accompanied the collapse of the entire crypto market in May, this may indicate a decrease in risk appetite on the part of retail investors.

The decline in activity in the derivatives market reduces its impact on the price. As a result, the spot market again begins to significantly influence the value of bitcoin.

“The future movement in the bitcoin market will depend on the real demand for the asset, and not on the speculative component,” the analysts concluded.

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