The world’s largest cryptocurrency, Bitcoin [BTC]He’s had a rough patch for the past few weeks.
With near-term weakness detected across some important on-chain coin metrics, BTC price continues to fall even with minimal additional selling pressure on the chain, Glassnode found in a report.
According to Glassnode, all asset markets, including bitcoin, stocks, currencies and bonds, have seen declines in the past week.
Affected by the downturn in the public financial markets, the continued decline in the price of BTC, despite very little selling pressure, indicates a drop in demand for crypto assets and a base of investors who want to exit the market at all costs.
BTC needs help
The first primary metric that Glassnode considered was the average coin lifespan (ASOL). According to the Glassnode Academy, this metric provides insight into the lifespan of the coins per transaction spent per day.
When this value is high, it means that a large number of ancient coins are experiencing some action. They may be making profits, taking advantage of the strength of a bull market, or have lowered their conviction in possession of the currency.
On the other hand, when the ASOL registers a low value, it means that the daily network activity is dominated by new coins, which leads to The output of older transactions remains stagnant, and the conviction to continue to hold that particular currency is high.
According to its new report, Glassnode has found that BTC’s ASOL has been in a gradual decline since the beginning of last year. Although it has surged in recent weeks with a bunch of old coins spent, this was only temporary, Glassnode found.
With the continued decline in price action with no high value in ASOL, Glassnode concluded, “Available demand can hardly sustain the daily pressure on the sell side, not to mention additional spending by recipients and/or surrender events.”
Glassnode also considered the year-to-year scale of BTC for the coin.
Coin Destroyed Days (CDD) at any time denotes the number of used coins multiplied by the number of days the coins were left unused.
As for the years of mint that destroyed metric, it is CDD coin pool for the past 365 days.
When this metric shows high value and is in an uptrend, it could mean that coins that have been idle for a long time are finally getting some action. This may increase the supply of liquid coins.
When this metric drops, it means that long-term holders are spending less coins. And interest in the original is declining. This will degrade the activity of transactions in the chain.
According to Glassnode, BTC’s devastating year continues to fall, indicating that the bear market is not nearing its end.
Moreover, in weak fundamentals, Glassnode found that active BTC is currently positioned at the lower end of a long-term bearish market channel. This means, according to the report,
“There is negligible growth in the active user base, and the network is currently served by an absolute minimum user base that we consider to be within ‘historical limits’. Should active units drop much further than that, this could indicate an unfortunate deterioration of the user base and entering an area of total vulnerability that has yet to be seen. We’ve seen it for many years.”