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

article-image

Artomat/Shutterstock, modified by Blockworks

share

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.

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.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit