Crypto investors based in Asia tend to sell more, and the ones in E.U. and U.S. tend to buy more.
Bitcoin’s price has recovered. It broke past the $43,000 mark on Binance on Tuesday.
It is good news for the market, but blockchain analytics company Glassnode’s latest report on the weekly activity of Bitcoin shows that, in near future, the volatility may be higher. The price hovered between $37,680 and $42,312.
“Bitcoin network utilization and on-chain activity remains firmly within bear market territory, albeit is recovering.”
Geographical Distribution of Investors
The research also observed the behavioural patterns of average BTC investors based on their geography.
Investors in the U.S. and E.U. tend to buy more than the Asian investors who incline more towards selling. These patterns have remained consistent since March 2020, except during November 2021 when all of them were buying.
The U.S. and E.U. investors have offered general bid support for the past two years with heavy buying between late 2020 and early 2021, while “both regions capitulated throughout May-July.”
Currently, E.U. investors are providing the largest amount of support.
On the other hand, Asia generally offered lower buying support through Q1-Q3 of 2021 and currently produce heavy selling pressure which the buyers are not able to withstand.
New Entities on Bitcoin Blockchain
Many on-chain metrics indicate that a bear market is going on.
New on-chain entities – addresses that have no association with existing clusters – have been increasing since mid-2021. This bear market pattern played out similarly from January 2018 through the first half of 2020.
Right now, around 110,000 new entities are created on the Bitcoin network per day similar to the 2019 mini bull run.
It suggests that we are in a bear market and maybe on the path to recovery.
Daily Transaction Volume
Another similar trend is observable in transaction counts, although the current rate of 215,000 Transactions/day is lower than what was observed throughout 2019.
For metrics like active addresses, new on-chain entities, and transaction counts, an accelerated growth rate would be a constructive signal, and likely support a healthy recovery in prices.
Large size transactions – greater than $1 million – represent a sustained 65% to 70% dominance in the 2021-22 bear market, as measured at the lows of both 50%+ drawdowns.
But transaction volumes are currently falling, and “a severe decline may signal a reduction in network utilisation, and would likely favour a bearish case.”
It is expected that the market will recover in the coming weeks are remain in a bearish cycle.
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