Key Points
- Bitcoin network adoption has dipped to ‘bear market’ levels, potentially impacting short term recovery.
- Despite this, some Bitcoin whales are accumulating, viewing current values as entry levels.
Bitcoin’s network adoption has seen a decline, echoing ‘bear market’ levels, which could potentially affect any anticipated strong recovery in the short term.
This analysis was provided by on-chain analyst JA Maartun, who noted that the activity of the Bitcoin (BTC) network had ‘slowed’ below the yearly Moving Average (365-day MA), reflecting ‘bear market’ levels that were observed in 2022 and 2018.
Understanding the Market Trends
The indicator monitors key network adoption elements, such as active addresses, block space demand, and transaction count per block. According to the chart, historically, such a slowdown in adoption has limited BTC’s upside in the near term.
Recent whale and miner movements also lean towards this weak sentiment. According to a CryptoQuant update, whales offloaded 30K BTC last week, which is nearly a $2.5 billion dump, assuming an average of $82K per BTC.
Furthermore, miners offloaded half of the amount dumped by whales (15K BTC) as their profit margin reduced to 33%, according to CryptoQuant. These sustained downward pressures have brought BTC accumulation to its lowest levels since February.
Accumulation Despite Weak Sentiment
Despite these trends, BTC has maintained a value above $80K for over a week. This resilience in BTC price is attributed to strong U.S. spot BTC ETFs and Michael Saylor’s massive bids, according to Bloomberg ETF analyst Eric Balchunas.
Glasnode has stated that some whales are already bidding at current levels despite the weakness, as indicated by the Accumulation Trend Score metric. Essentially, some large players do not see the current values as selling levels, but as entry levels to add into positions.
However, the Coinbase Premium Index showed that demand from U.S. retail was at neutral levels and could go in either direction. A sustained move higher by the Coinbase Premium Index could reinforce increased demand for BTC recovery to extend. Conversely, a dip lower would drag BTC prices down again.
