Cryptocurrency analyst Ali: Bitcoin on-chain activity has fallen sharply
Bitcoin has quadrupled in price since the start of 2023, reaching an all-time high of $73,798 in March, a growth driven largely by demand from U.S. exchange-traded funds (ETFs). However, recent observations by cryptocurrency analyst Ali show a significant decline in Bitcoin’s on-chain activity, a trend that could be worrying.
On-chain activity refers to transactions and interactions recorded directly on the blockchain. This indicator is crucial for understanding the behavior and sentiment of market participants. Higher on-chain activity typically correlates with increased investor interest and trading volume, while a drop in activity may indicate the opposite.
Source: X Investors’ interest in Bitcoin declines and internet usage decreases
Analyst Ali emphasized that the decrease in Bitcoin’s on-chain activity related to exchanges may indicate weakening investor interest and reduced network usage. With fewer transactions on exchanges, this suggests traders and investors may be storing assets in cold wallets, reducing trading activity, or reflecting a cooling of investor interest. This decline in on-chain activity is not necessarily a negative indicator of Bitcoin’s long-term prospects, but may simply reflect a period of consolidation in the market or a big move by investors on the sidelines.
Bitcoin price may continue to be limited in the near future
In addition, according to QCP Capital’s view, the consolidation of Bitcoin prices may continue for two months, and the next bull market is expected to begin in September 2024. Bitcoin is currently trading at $64,362, down 0.4%, with a market capitalization of $1.268 trillion.
QCP Capital further pointed out in a post on It will continue and delay the recovery of Bitcoin price. As a result, miners’ Bitcoin holdings have fallen to their lowest levels in 14 years, with total reserves reduced by more than 5,000 Bitcoins since the start of the year.
In addition, the market is uneasy about reports that the German government plans to sell off Bitcoin in large quantities. Earlier this week, the German government sold 3,000 Bitcoins, leaving 47,000 Bitcoins yet to be sold.
Finally, what cannot be ignored is the ongoing sell-off in the ETF market, with spot Bitcoin ETFs registering more than $500 million in sell-offs in the past week, showing the lack of confidence in Bitcoin among institutional investors waiting for its trend to reverse.
September-December call options were heavily bought, bullish prospects!
Despite the current bearishness in the market, several positive factors were mentioned in the QCP Capital report, giving a bullish outlook for Bitcoin. One of the key factors was MicroStrategy’s new purchase of 11,931 Bitcoins, worth a staggering $800 million. Additionally, BitMEX CEO Arthur Hayes also shared an optimistic general economic statement, explaining how the current Japanese banking crisis could trigger a Bitcoin bull run.
QCP Capital also noted that despite the current strong bearish sentiment, call options from September to December were heavily bought, which is a clear indication of expectations for significant market volatility after the summer consolidation, especially in the period surrounding the US election.
Overall, although Bitcoin currently faces many challenges, the market is still full of expectations for its future prospects. With heavy buying of call options and multiple positive factors, Bitcoin is poised for a market turnaround in the coming months. Investors will pay close attention to market dynamics and look forward to Bitcoin once again ushering in a new wave of growth.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
