Despite today’s collapse in the coin market, many Bitcoin indicators remain normal. The chart of the proportion of coins that have not moved for at least two years seems particularly curious. The figure now stands at 50.4 percent, meaning that every other BTC has been lying unmoved at its owner’s address for at least two years.

With this in mind, we can assume that crypto investors are counting on the long term and are willing to wait many years before selling the cryptocurrency. Accordingly, they have no doubts about BTC’s prospects.

What’s going on with Bitcoin?

Yonsei_dent noted that the current local bull run does not coincide with previous growth cycles of the major cryptocurrency. The problem is the dynamics of the number of active Bitcoin wallets. Here’s his quote on the matter.

“Active addresses is a metric that includes all addresses sending and receiving BTC, which allows you to estimate the demand in the market. “The ‘price’ of an asset is determined by the laws of supply and demand. The cryptocurrency market is no exception. For asset prices to rise, interest and demand among cryptocurrency buyers must be maintained.


In other words, the expert hints at a gradual decline in buyers, who are precisely the main driver of digital asset prices. However, there is little point in comparing the current situation in the coin market to previous cycles. As the digital asset niche has shown many times before, not only is it sometimes not guided by its previous behavior, but sometimes it acts in a completely illogical way.

For instance, last week a new data was announced for consumer price index in USA or so called CPI index. The result was a year-on-year increase of 6.4 per cent compared to the forecasted 6.2 per cent. This is essentially negative news, as inflation was higher than predicted. Despite that, Bitcoin managed to rise from those $21.7 thousand to a local high of $25.3 thousand. Naturally, such behavior given the situation in the economy does not seem to be adequate.


The chart below shows that the 30-day moving average of active addresses grows after the end of the bearish trend in 2018 and the collapse of BTC in March 2020 on the background of news about the beginning of the COVID-19 pandemic. However, there are no such trends yet in 2023. Consequently, the recent market collapse has not generated enough buyers.

The Glassnode platform experts also suspect that the current market situation does not fundamentally make it possible to declare the start of the bull run with complete certainty. According to them, the volume of transactions in the BTC network remains low, which means blockchain user activity leaves a lot to be desired. Here’s the relevant rejoinder, cited by Cointelegraph.

Despite an increase in activity on the network and a historic high in total UTXO withdrawals, transfer volumes are surprisingly low, and for both long-term and short-term holders.

A lot of the fundamental data on blockchain activity may also be skewed given the unprecedented popularity of the Ordinals project, which allows Bitcoin-based NFTs to be issued. It has previously been claimed that commissions on the main cryptocurrency’s network are rising precisely because of Ordinals.

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The threat of Bitcoin’s price falling has been backed up by negative news of increased pressure from US regulators on the industry, sources say. As a reminder, crypto-exchange Kraken was recently banned from providing steaming services to US residents, on top of which it was also forced to pay a $30 million fine. In addition, Paxos was banned from supporting the issuance of BUSD Stablecoin.

According to new statistics from the CoinShares platform, this has led to institutional capital outflows of $32 million in the past week, which includes money from large investors. This is so far the largest outflow of investor funds since the beginning of this year. Most of the outflow, 78 percent, occurred for investment instruments in the BTC ecosystem.

In other words, the news of Kraken and Paxos’ problems was taken worst by large holders of Bitcoin and trading instruments based on the main cryptocurrency. There is more optimism among altcoin holders, with capital inflows into related investment instruments up 10 per cent over the same time period.

The crypto market may not necessarily be in a global up or down cycle. Recall that after the end of the bearish trend in 2018, Bitcoin’s price would start to rise and then show marked declines again. So it is possible that a similar transition period to the next bullrun is going on right now.

On top of that, according to Glassnode, the cryptocurrency industry is seeing the conversion of Stablecoin into BTC. This may speak to investors’ simple desire to get in touch with Bitcoin, as well as their fear given the recent problems of the BUSD stabelcoin. Here is the relevant chart.

Separately, we note that the final fate of BUSD from Paxos and Binance is still unknown. As Reuters sources noted yesterday, Paxos representatives are now “in constructive talks” with SEC officials. Most importantly, for now, such communication will continue in a non-public format.


We believe that the outlook for the cryptocurrency industry is unclear, as the sector is notorious for its incredible volatility. However, one way or another, Bitcoin managed to take the $25,000 level the day before, which seems like a serious achievement after the $15,000 level in November 2022. So it cannot be ruled out that the bottom for digital assets may have already passed.