A recent report from Glassnode has revealed that Bitcoin investors are showing doubts about the cryptocurrency’s short-term prospects, as indicated by declining exchange-related on-chain volumes. This cautious approach among market participants is evident in the data.
Centralized exchanges continue to be the focal point for speculation activity and price discovery. By analyzing on-chain volumes across these venues, one can assess investor activity and appetite for speculation. Glassnode’s analysis of the 30-day/365-day momentum crossover for exchange-related inflows and outflows shows a significant drop in the monthly average volume compared to the yearly average. This suggests a decrease in investor demand and less trading by speculators within the current price range of BTC.
Settlement Slowdown on Bitcoin Network Despite Surging Hashrate
Concurrently, there is a settlement slowdown on the Bitcoin network, which is processing and settling approximately $6.2 billion worth of transaction volume per day. However, the settlement volume is trending towards its yearly average, indicating a cooling off in network usage and throughput, which is viewed as a negative observation.
The CVD indicator reflects an increase in investor sell pressure over the last 90 days, contributing to the downward price trend. Despite these bearish metrics, Glassnode highlights that the Bitcoin Hash Rate is approaching new all-time highs, showcasing the growing competitiveness of the mining scene and their confidence in the Bitcoin network.
As of the time of writing, BTC has experienced a 1.21% decline in the last 24 hours, trading at $56,119.
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Analysis:
Bitcoin investors are currently expressing doubts about the short-term outlook of the cryptocurrency, as indicated by declining on-chain volumes. This cautious sentiment is reflected in the data, with a notable drop in exchange-related volumes. The slowdown in settlement on the Bitcoin network and the increase in investor sell pressure further contribute to the negative market sentiment. However, the surging hashrate of the Bitcoin network suggests growing confidence among miners. Overall, these factors could impact the price of Bitcoin in the near future, making it essential for investors to stay informed and monitor these trends closely.