Bitcoin seeing ‘strong demand’ as crypto market eyes ‘recovery phase’

Analysis of previous bitcoin bull market corrections shows past year’s drawdown was much weaker than prior cycles — an indication of strong demand

by Sebastian Sinclair /

July 12, 2023 04:30 am

Artomat/Shutterstock, modified by Blockworks

Trade activity for the world’s largest digital asset this year has, so far, remained fairly neutral to wider macroeconomic developments as market demand for bitcoin continues to prop up its price.

Assuming the November 2022 lows represent the bottom of the previous cycle, it’s possible to analyze the extent of the “bull market corrections” up to this point, Glassnode said Monday.

The steepest decline recorded for bitcoin (BTC) this year represents a mere -18%, which is low when compared to past cycles of bygone eras.

Data shows that, on average, bitcoin’s prior peak-to-troughs stood at roughly 48%, suggesting a “relatively strong degree of demand” for bitcoin currently exists, Glassnode said.

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Bitcoin’s bull market correction drawdown history; Source: Glassnode

To further that point, the number of unique addresses holding 1 BTC surpassed the 1 million threshold for the first time on May 17 of this year — an indication of greater adoption.

Bitcoin’s hash rate, also another measure of adoption based on the network’s increase in security, rose to fresh heights on July 9, above 402 ExaHash per second (EH/s), data shows.

Mathias Beke, co-founder and CTO at market maker Kairon Labs, told Blockworks current sentiment and price action marked a “typical recovery phase.”

When asked if traders were looking to sell following excess market froth following Blackrock’s spot bitcoin ETF application, Beke said they were wary of potential declines and as such are not making significant moves in either direction.

“We think it’s a mix of big tech being fairly parabolic, but it looks like they might cool down a bit,” he said.

Still, uncertainty surrounding the US market and its approach to digital asset regulation has given traders pause, particularly as the asset’s four-year halving event swiftly approaches.

“At the moment there’s a lot up in the air around Binance, as well as the liquidations that could take place from FTX and Celsius,” Beke said.

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