Bitcoin News; Today’s on-chain analysis evaluates the declining hashrate of the Bitcoin network, which correlates with the downward trend of the BTC price. However, it turned out that there are more new investors taking the bottom to join the crypto market.
At the same time, indications of the shifting positions of long-term stockholders and the dwindling BTC liquid supply are signaling a potential trend reversal. Still, the correlation between BTC’s falling price over the past two months and short-term traders’ sales is clear.
Hash rate and addresses decline
Since its all-time high of $64,800 on April 14, the hash rate of the Bitcoin network has been on a steady decline. The current value has reached levels not seen since May 2020 (green circle) when the BTC price was $9,000.
The drop in the hash rate is therefore associated with the drop in BTC price. One of the reasons is the concern about the regulation of Bitcoin mining in China and the closure of mines there.
We see similar behavior in the blockchain indicator showing the number of active BTC addresses. Here, too, the network is seeing a drop from its all-time high to levels not seen since March 2020 (green circle). At that time, Bitcoin was recovering quickly from the COVID-19 crisis and the low was $3782.
Despite this, Willy Woo tweeted a chart of the 7-day moving average of Asset Net Growth, which gives a slightly different picture. Net user growth is “as strong as ever,” according to this on-chain analyst.
Indeed, the chart shows that after the double bottom in May and June, there has been a resurgence in user growth who joined the market in the last few days and took advantage of the discounted BTC price.
Hodlers increase positions and BTC loses liquidity again
Yann & Jan, another on-chain analyst, posted updated charts on long-term hodlers (LTH) positions and the change in BTC liquid supply. They offer additional arguments that current price action could potentially serve as a downtrend reversal and a continuation of a long-term bull market in the future.
First of all, the chart of long-term hodlers positions clearly shows a progressive phase of accumulating and buying BTC that increases inversely with Bitcoin price. Such a strong increase in positions by LTH has not been seen in over a year.
Then, for the first time since May lows, the BTC liquid supply change (Liquid Supply Change) chart entered negative territory. This means that once again the amount of Bitcoin available for trading is starting to outpace demand, potentially leading to higher prices.
Finally, the last chart confirms the trend that BeInCrypto wrote in an analysis a few days ago. The group of investors that make the most losses during the declines are the short-term speculators in the bright red area (yellow circle).
This group has recently been joined by some long-term hodlers (light blue area), which were sold at a loss of about $30,000. However, this is a small fraction as most LTHs are still in profit.