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Today’s chain analysis highlights the decline in the Bitcoin network hashrate, which correlates with the downtrend in the BTC price. However, it turns out that there are even more new users taking advantage of the background to join the crypto market.
At the same time, indicators of the development of long-term hodler positions and the declining supply of BTC liquid provide signals of a possible trend reversal. Still, the correlation between the fall in the price of BTC over the past two months and the liquidation of short-term speculators remains very apparent.
Drop the hashrate and addresses
Since the all-time high of $ 64,800 on April 14, the Bitcoin network hashrate has seen 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 hashrate is therefore correlated with the drop in the price of BTC. One of the reasons is also the FUD related to the regulation of Bitcoin mining in China and mine closures there.
We see similar behavior in the chain indicator, which shows the number of active BTC addresses. Here too, the network sees a drop from a record level to levels not seen since March 2020 (green circle). At the time, Bitcoin was recovering quickly from the COVID-19 crisis and is bottoming at $ 3,782.
Despite this, Willy Woo tweeted a chart of the 7-day moving average of net entity growth, which gives a slightly different picture. According to this chain analyst, net user growth is stronger than ever.
Indeed, the chart shows that after the double bottom in May and June, the last few days have seen a resumption in user growth, who appear to be joining the market and benefiting from the reduced BTC price.
Hodlers increases positions and BTC loses cash again
Another analyst on the chain, Yann & Jan, posted updated charts of long-term hodler (LTH) positions and the development of the BTC liquid supply. They provide additional arguments that the current price action could potentially serve as a downtrend reversal and a continuation of a long-term bull market going forward.
The story continues
First of all, the chart of long-term hodler positions unambiguously indicates a gradual phase of accumulating and buying BTC, which increases inversely in proportion to the price of Bitcoin. Such a sharp increase in LTH positions had not been observed for over a year.
Then, for the first time since the lows in May, the BTC (Liquid Supply Change) graph of the evolution of the liquid supply entered negative territory. This means that once again the amount of Bitcoin available for trade begins to exceed demand and could potentially lead to higher prices.
Finally, the latest chart confirms the trend that BeInCrypto wrote about in an analysis a few days ago. The group of investors who made the most losses during the declines are the short-term speculators in the bright red zone (yellow circle).
This group was also recently joined by a few long-term hodlers (light blue zone), who sold at a loss of around $ 30,000. However, this is a small part, as most LTHs are still under protection.
For the latest Bitcoin (BTC) analysis from BeInCryptos, click here.
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