On-Chain Metrics Flash Crypto Market Low Signals, But Macro Environment Still Wobbly: IntoTheBlock CryptoBlog

Market intelligence platform IntoTheBlock says that while on-chain data hints at a bear market bottom for crypto assets, the overall macro environment is still fragile.

in a new articlethe crypto analysis company finds that the number of Bitcoin in the long term (BTC) holders, or traders who have owned BTC for at least a year, exploded in 2022, noting that the investor class is known to buy the crypto king during bear markets and create a level of support.

“HODLers backing a bottom – long-term bitcoin holders historically take advantage of bear markets to buy bitcoin.

In 2022, we saw the amount of Bitcoin held by addresses held for over a year (“hodlers”) increase by 50%, from 10 million BTC to 15 million BTC. This pattern has been seen in previous bear markets, with the hodler balance only declining after new highs were established.

The article also reveals that half of Bitcoin holders are currently underwater, which was the case the last few times Bitcoin found its bear market bottom.

“Previous bear markets have bottomed out after reaching the point where 50% or more of holders are losing money on their positions, classified as ‘out of the money’ by IntoTheBlock.”

According to IntoTheBlock, stocks and cryptocurrencies, especially BTC, have started to correlate again after the collapse of major crypto exchange FTX caused their paths to fork.

However, the firm notes that while current conditions resemble bear market conditions of the past, it is difficult to determine what is on the horizon for Bitcoin.

“Macro correlations are back – after diverging in paths throughout the FTX meltdown, crypto and stocks have once again moved in tandem. The correlation coefficient between Nasdaq and Bitcoin has risen to 0.86 currently, suggesting a very strong statistical relationship between the two…

On-chain measures of previous bear markets follow patterns of previous lows, but the growing relevance of these macro factors still casts uncertainty as to whether the recent price action marks the start of a bull market or simply a bullish trap.

Bitcoin is changing hands for $22,624 at the time of writing, a gain of almost 7% in the last 24 hours.

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Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and transactions are at your own risk and any loss you may incur is your responsibility. The Daily Hodl does not recommend the buying or selling of cryptocurrencies or digital assets, nor is The Daily Hodl an investment adviser. Please note that The Daily Hodl engages in affiliate marketing.

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