The Bear Market Blues: Analyzing Bitcoin’s On-Chain Activity Trends

Current State of the Bitcoin Network

The Bitcoin network continues to exhibit signs of a bear market, with on-chain activity reflecting a struggle among buyers and sellers. Specifically, traders from the United States and European Union seem to be buying, while sellers in Asia are causing a ruckus, much like a toddler in a toy store who just realized they can’t take everything home.

Price Movements and Market Performance

According to a recent report from blockchain analytics firm Glassnode, Bitcoin’s price has remained stuck in a relatively tight range, hovering between $37,680 and $42,312. On Tuesday, however, the cryptocurrency experienced a sudden price boost, reaching levels not seen in two weeks. It’s as if Bitcoin took a shot of espresso, but the overall momentum suggests that it could use another cup.

Regional Buyer and Seller Strategies

Glassnode’s research highlights the geographical disparities in investor behavior. U.S.- and EU-based investors are pulling the trigger to buy, while their Asian counterparts are typically offloading Bitcoin. The pattern has been consistent since March 2020, with the notable exception of a buyer frenzy last November. A Glassnode researcher aptly noted, “Buying pressure has primarily manifested during U.S. and EU trading hours,” while Asian traders seem to prefer the selling hours like it’s the happiest hour of the day.

Metrics Indicating Bear Market Trends

Several on-chain metrics offer further evidence that we’re indeed in bear territory. Since mid-2021, the number of new entities—wallets that are not connected to existing ones—has slowly been on the rise. Much like that old saying goes, “slow and steady wins the race,” the current growth rate tells a distinct bear market story that echoes the patterns seen from January 2018 to mid-2020. We’re seeing around 110,000 new entities sheer into existence daily, which is a far cry from the explosive growth that accompanies bullish markets.

Challenges Faced by Long-Term Holders

Long-term holders (LTH), defined as coins that haven’t moved for over 155 days, are starting to feel the pressure to sell. While there’s been an uptick in selling among these seasoned investors, the total LTH supply remains relatively stable thanks to the short-term holders (STH) who are switching things up. In essence, it’s like a game of musical chairs, only with significantly more financial stakes and way less music.

Conclusion: A Slog Through the Bear

In summary, the Bitcoin network is experiencing a tangible lull in activity as both buyers and sellers adjust to respective market conditions. With diverse strategies depending on where investors reside, we’ll keep our eyes peeled on this ongoing dance between regions. Until then, let’s enjoy the wild ride and hope Bitcoin tries to wake up from its bear hibernation.