In the early morning of July 14, the Bitcoin price unexpectedly hit US$31,550, and then slowly recovered to above US$32,900 in early trading.
The rapid decline close to the critical USD 30,000 resistance level has caused alarms between bulls and bears, while the USD 30,000 to USD 32,000 level continues to function as a support level. A recent market update by ByteTree CEO James Bennett portrays the possible existence of BTC A mixed picture of the situation.
according to Bennett’s analysisHowever, due to the decrease in miner sales and the increase in accumulation, the price of Bitcoin has stabilized at around $34,000, but he also warned that several indicators show that the decrease in network activity implies that BTC is still in a neutral zone, where the appetite of major players has fallen.
Bitcoin transactions fall
According to Bennett, weekly bitcoin transactions have been in a sharp decline since April, and the current transaction volume is close to 1.48 million, which is lower than the high of 2.57 million on January 9.
Due to the current market downturn and declining transaction volume, the total transaction volume on the Bitcoin network has dropped to 23.6 billion USD, the lowest level since December 2020.
Bennett stated that due to the reduction in on-chain activity:
“Bitcoin is unlikely to see its next price increase, and it may even fall.”
Bitcoin circulation speed drops to an all-time low
Bitcoin’s circulation speed hit a record low of 195% on July 11, a sharp drop from the recent high of 593% on May 23. The velocity of circulation is “a non-price indicator that measures the vitality of the Bitcoin network” according to To Bennett.
“In the second half of last year, from July to December, the circulation speed accelerated, and then the price also increased. As the speed fell during the year, prices followed again.
related: BlackRock CEO says long-term investor demand for cryptocurrencies is low
Miners finally show some signs of accumulation
A positive sign in the market is the recent increase in the accumulation of miners. Due to China’s crackdown on the mining industry, many have been completely closed and are in the process of relocating to other countries. This number has declined in recent months.
As the bitcoin inventory held by miners stabilized and began to rise, Bennett hinted that miners would increase their holdings again, which can be interpreted as a signal that bitcoin prices may be in the process of stabilizing.
The dominance rate of institutions monitoring the top quintile of the Bitcoin heat map also showed an increase starting from July 12. This shows that large Bitcoin holders have increased their activities in the past few days, while the price of Bitcoin held more than $31,000.
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