In recent days, price fluctuations have decreased and several key metrics indicate that Bitcoin has begun to recover from the fall of the past few months. Experts believe that intra-chain standards are slowly improving, and this could be the beginning of a new uphill storm.
to the the report Decrypt, the latest weekly report from the analytics platform Glasnood, shows that while the price of bitcoin has fluctuated within a limited range over the past few weeks, the benchmarks within key chains show a broad uptrend.
It started last week with a price peak of $ 35,128 and dropped to a price level of $ 32,227. These conditions create a sense of calm before the storm, as there is quiet activity in instant markets, derivatives and intra-chain indicators.
In his report, Glasnood cited the early signs of bitcoin bitcoin recovery after mining was banned in China. The move forced local mining pools to cease operations or relocate abroad. Researchers believe that the rate of return of Bitcoin network processing power can determine whether overall market sentiment is bullish or bearish.
The bitcoin hash rate, which represents the total processing power allocated to the network, has recovered somewhat from the recent 55% drop to 39%. If the benchmarks remain at this level, it means that about one-third of the bitcoin hash power, which was reduced due to Chinese restrictions, has returned to the network.
If the hash rate is recovered quickly, it could mean that a significant number of miners have successfully relocated and restarted their devices. In the same way, this can relieve the sales pressure from the miners to some extent; Because they can be profitable again and not have to worry about cashing in on their earnings.
Meanwhile, the bitcoin inventory volume of active miners is increasing again. This means that they are rapidly increasing their bitcoins to compensate for the sales made by inactive miners.
Another indicator that shows the feelings of the bitcoin market is that bitcoins are mainly deposited in or out of exchange offices. Basically, the more traders go to exchange offices, the more likely they are to sell their bitcoins, and vice versa.
In May, when bitcoin was trading at about $ 60,000, we saw a massive outflow of exchange reserves. Many of them went to the Grayscale Bitcoin Trust or were accumulated by institutional investors.
However, after the Bitcoin price dropped by 50% in the last few months, users began to deposit their bitcoins widely on trading platforms. It can be said that they sell their bitcoins when the price drops, or at least prepare for it.
Glasnood wrote in his report:
Since May, with a price reduction of almost 50%, a flood of bitcoins has been deposited in exchange offices. Considering the 14-day moving average, in the last 2 weeks we have seen a positive trend of returning to the outflow of exchanges at the rate of about 2,000 bitcoins per day.
As bitcoin price fluctuations decrease, more investors are withdrawing their assets from exchanges without fear of selling pressure. In this way, the transactions that take place represent a more targeted and logical example than an ascending bubble market.
Meanwhile, activity in the digital currency derivatives market continues to decline, such as futures and options. Following the widespread liquidation of traders, which coincided with the decline of the digital currency market in May, this event may indicate a decrease in the willingness of traders to make irrational leverage.
Glasnod goes on to explain that such a significant decline would reduce the impact of the derivatives market on prices. As a result, instead of pushing for short, long, or leverage liquidity in the derivatives market, Bitcoin’s instant trading volume is gradually gaining ground as the main price-driving force.
The researchers’ conclusion is that the next big move for Bitcoin, instead of premiums or irrational value differences, is likely to be conditional supply and demand.
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