- Bitcoin’s on-chain activity appears to have dropped to pre-2021 levels.
- The increasing stagnation of Bitcoin’s price is causing market uncertainty.
- The sluggishness of Bitcoin’s price movement is also reflected in the Relative Strength Index (RSI).
Bitcoin’s on-chain activity seems to have regressed to levels last seen before its all-time high in 2021. The CEO of CryptoQuant, Ki Young Ju, announced that Bitcoin’s velocity has hit its lowest levels of the year. Furthermore, the stagnation of Bitcoin’s price is causing market uncertainty.
The lack of a clear BTC price trend for months is reducing the driving force for buying or selling. This is underscored by the velocity, a measure of the BTC units moving on the network. The market’s “wait and see” mode is reflected in the lack of significant buying or selling activity among high-volume investors. The sluggishness of Bitcoin’s price movement is also impacting the RSI.
Bitcoin Supply Stagnates at $26,000
Bitcoin is becoming increasingly stagnant at its current price levels. With no general BTC price trend for months, the impetus for buying or selling is dwindling. This is highlighted by the velocity, a measure of the BTC units moving on the network. According to CryptoQuant, on daily timeframes, the metric is currently at levels last seen in October 2020. Ki commented, “There are two sides to this situation”.
It could be seen as positive because whales are holding, or negative because it’s not being transferred to new investors. As part of a comment indicating that the market is in “wait and see” mode for BTC, he referred to the absence of similar large-scale buying and selling activity among high-volume investors. According to statements, noticeable new situations could be seen at the beginning of the year with the start of BTC/USD’s 70% 1st quarter earnings series.
What’s the State of Bitcoin Selling?
Meanwhile, volume data seems significant for another reason. At the end of 2020, after making a long-term bottom, the metric’s recovery accompanied Bitcoin surpassing $20,000 a year later to reach its all-time high. However, unlike then, Bitcoin currently appears generally oversold at the $26,000 level according to the daily Relative Strength Index (RSI), which could mean that people’s confidence is gradually decreasing. According to a statement, the 12-hour RSI reached its lowest level in the last five years this month and has not yet recovered. This could indicate that investor interest has not yet materialized.
Conclusion
Bitcoin’s on-chain activity, price stagnation, and the state of selling are all factors contributing to the current market uncertainty. While some see the situation as positive, with whales holding onto their Bitcoin, others view it as negative, with new investors not receiving transfers. As the market continues to be in a “wait and see” mode, the future of Bitcoin remains unclear.
