Bitcoin (BTC) bear markets come in many shapes and sizes, but this one gave a lot of reason to panic.
BTC was described as a “constant low” threat in 2022, but just a year ago a similar perception of the threat swept through crypto markets, with bitcoin seeing a 50% drop in 2022. a few weeks ago.
However, over the price, the data on a chain for 2022 looks very different. Cointelegraph looks at three key indicators that show that this bitcoin bear market is not like the last one.
The Hashrate
Everyone remembers the exodus of bitcoin miners from China, which effectively prevented the practice in one of its most prosperous regions.
Although the scope of the ban has been questioned since then, as a result of the action taken at the time, a large number of network participants – mainly to the United States – moved in a few weeks.
As a result, the hashrate of the Bitcoin network – the mining – oriented computing power – has halved. At the time, this was an unprecedented situation, and the miners felt they had no choice but to at least temporarily cease their activities.
This time, it’s not bureaucracy but simple calculations that put miners at risk. The fall in the price of BTC to its lowest level in 19 months has put increasing pressure on the profitability of mining operations.
However, as Cointelegraph reports, massive capitalization need not happen even at current levels, as miners who were expected to sell their BTC stocks already appear to have done so.
The hashrate supports this thesis, having dropped by a maximum of about 20% from all-time highs before retrieving it, according to estimates from data provider MiningPoolStats.
Active addresses
The fall of July 2021 was accompanied by a slowdown in Bitcoin network activity.
Active shipments, as measured by CryptoQuant ‘s on – chain analytics platform, declined significantly until June last year before bouncing back in line with price in the third quarter.
This time around, that fall has not happened, suggesting that the busier market is moving its BTCs. This has a number of implications – low prices may lead to sellers; traders may seek to profit from volatility; others may want to buy the swim.
It should be noted, however, that the total volume on the chain remains weak, which means that support on the part of the buyer is probably not enough to reverse the downward price trend according to analysts.
Exchange reserves
Finally, and despite the much lower amounts mentioned above, bitcoin exchanges are losing about $ 20,000 in BTC – and fast.
Read also: These 3 Indicators suggest that Bitcoin price fall is not over
Price crashes typically boost exchanges as traders prepare to panic or sell short. This time around, it seems to be really different in that regard, because exchange users pull BTC out of their accounts, instead of loading them.
The top 21 exchanges tracked by CryptoQuant currently have a balance of 2.419 million BTC, up from 2.544 million at the beginning of the second quarter.
Last year, exchange reserves rose inversely during the Q2 downturn, only to resume its own decline as the BTC / USD pair reunited.
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