Volatility, liquidity, trading volume and the volume of on-chain value transferred for Bitcoin are at historical lows. This reinforces the possibility that the market has entered a period of extreme apathy and exhaustion, according to Glassnode.
Liquidity across the digital asset market continues to dry up, with both on-chain and off-chain volumes reaching historical lows.
HODLing remains the market preference, a significant proportion of the supply is teetering on the edge of falling into a significant… pic.twitter.com/twInh0OqKf
— glassnode (@glassnode) September 11, 2023
Since the end of August, Bitcoin, Ethereum and stablecoins have seen a return to balance and a moderate outflow of investor funds. This indicates a certain degree of uncertainty, experts noted.
The total supply of “stable coins” from a peak of $163 billion in April 2022 decreased by 26%, to ~$120 billion. Analysts explained the dynamics by rising government bond interest rates and worsening cryptocurrency market conditions.
The chart below shows net inflows into centralized platforms. The receipts of bitcoins and Ethereum are interpreted as pressure from sellers, while stablecoins are interpreted as the actions of buyers.
The chart shows that the aggregate metric has returned to neutral since April 2022, consistent with a slowdown in capital inflows in the two major cryptocurrencies. The market is becoming more and more apathetic and uncertain, experts stated.
Volatility remained at historically low levels, which portends significant price fluctuations in the future. Digital gold sale with price drop to $26,000 and Grayscale victory over SEC did not fundamentally change the situation.
The environment of low liquidity and volatility was also reflected in the volume of settlements on the network. The daily volume of coins changing hands ($2.44 billion) is hovering near the lowest level since October 2020.
The volume of realized gains and losses is equivalent to pre-2020 bull market values. Realized value held in the hot supply group is at historical lows. In other words, there are very few coins in circulation that are older than one week.
Derivatives markets are also characterized by sluggish trading activity.
The daily turnover of Bitcoin futures dropped to $12 billion (it was lower only at the end of 2022). In the digital gold options market, the metric fell by 72% from ATHamounting to $437 million.
Implied volatility over a one-month horizon returned to its all-time low of 33.9%.
Against the backdrop of low activity, the share of coins at the disposal of hodlers reached a historical high of 14.74 million BTC. Speculators’ wallets contain the minimum since 2011, 2.46 million BTC.
At the time of writing, the cost of 4.81 million BTC was between $20,300 and $29,600. At prices below $26,000, the lion’s share of short-term investors’ positions turned into losses. At the time of writing, this figure was 83.7%.
“One could argue that this state of affairs is a little unnerving for this more sensitive cohort. Many psychological marks still need to be overcome,” – explained the analysts.
Recall that on September 11, Bitcoin tested levels below $25,000.
Previously, BitMEX co-founder Arthur Hayes admitted a possible short-term drop in the price of digital gold below $20,000 followed by a new bullish impulse.
However, in September, he pointed to the positive prospects for the first cryptocurrency, contrary to politics Fed.
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