Bear Market Who? Data Shows High Conviction In BTC And ETH
September 02 2022 - 2:07AM
NEWSBTC
This is the weirdest bear market to date. It seems like most people
were prepared for it, even though the death spirals and Chapter 11
bankruptcies that started it came out of nowhere. In any case,
every coin is in the red. The market should be in a state of fear,
uncertainty, and doubt. That is certainly not the case for the two
leading cryptocurrencies. The circumstances might be different for
each one, but both markets show signs of unwavering
conviction. Related Reading: 62% Of Addresses Keep Their
Bitcoin Holdings For Over A Year In Bear Long-time holders of
bitcoin and ethereum seem to be laughing in the bear market ’s
face. In the latest edition of The Wolf Den, the author uses
Glassnode and Intotheblock’s data to show us how this is
true. The Bear Market Vs. Bitcoin “On-chain evidence from
Glassnode suggests that there has been no meaningful reduction in
the conviction of long term believers,” the newsletter states. To
prove this, The Wolf Den looks at the “Dormancy Metric.” The number
that “tracks the average age of every Bitcoin that moves,
determined by when it was mined. One of the ways to gauge the
sentiment of long-term holders is to asses the average age of coins
moving around the market.” As attentive readers might suspect, the
coins that are “moving around the market” are extremely young. In
fact, their age “is at multi-year lows. The dormancy value is very
low.” This is consistent with previous bear markets, in which
dormancy values tend to be low. The newsletter quotes analysis from
Glassnode: “The decline in lifespan metrics actually bodes well for
the longer-term, as it indicates old coins are stationary, and
declining prices have little psychological impact on this cohort’s
conviction.” So, if we focus on the big picture, everything looks
like it’s supposed to. A healthy habit during bear markets. BTC
price chart for 09/02/2022 on Cexio | Source: BTC/USD on
TradingView.com The Ethereum Merge Is Upon Us For this section, The
Wolf Den used data from IntoTheBlock. Before getting into it, the
author clarified the sequence of events that compose the mythical
“merge”. First of all, on September 6th, “the Bellatrix upgrade
happens on the Beacon chain”. Then, between September 10th and
20th, “the official transition from Proof-of-Work (PoW) to
Proof-of-Stake (PoS) will occur”. The Ethereum Foundation estimates
that the merge will happen on September 15th. To evaluate the
Ethereum network’s state during this bear market, The Wolf Den
looked into “netflows onto centralized exchanges”. Overall, more
ETH is leaving the exchanges than entering, which is bullish. It
tends to mean people are not looking to sell their assets. However,
with the merge looming and the bear market among us, it could have
other meanings. On the one hand, people might be “bullish on
the merge as users believe that the merge will happen successfully
and are loading up on ETH for potential price action.” On the
other, they might be anticipating the possible ETH Proof-Of-Work
hard fork. If that happens, “all ETH being held in wallets can
claim ETHW at a 1:1 ratio, traders might be preparing themselves to
claim the most ETHW possible.” Related Reading: This Indicator
Predicts Probable Bearish Trend Ahead For Ethereum Another
curiosity about the bear market’s current state is this. Lately
“the average inflow transaction size is generally larger than its
outflow counterpart”. According to The Wolf Den, that’s not a
problem because “netflows onto centralized exchanges” are low. And
that’s a stronger indicator. However, those large inflow
transactions might suggest something that makes sense. “Larger
traders and institutional investors are more skeptical about the
success of the merge”. In any case, long-time bitcoin and ethereum
holders show unwavering conviction despite the bear market’s
conditions. For different reasons altogether. Featured Image by
congerdesign from Pixabay | Charts by TradingView
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