Author: Checkmate; Translation: Vivian; Editor: Vivian
Bitcoin’s markets have been relatively soft this week in terms of price and on-chain activity. Prices traded within a recent consolidation range, falling from an early-week high of $41,295 to a weekend low of $33,818.
The overall on-chain activity of Bitcoin and Ethereum is very low, and the demand for block space has dropped to the lowest level in 2020. However, while low demand for deals is a generally bearish insight, it also reflects the reluctance of the strong to spend at these prices. Are they waiting for a rescue rally?
On-chain analysis
On-chain analysis
The situation on the chain is serious.
Both Bitcoin and Ethereum experienced a sharp slowdown in on-chain activity, with active addresses and total transfers falling back to levels seen in 2020 and early 2021. Bitcoin’s active addresses have fallen 24% from a generally sustained peak of 1.16 million between March and early May. The current activity of 8.84 million addresses was last seen at this time last year.
For Ethereum, the drop in active addresses was even more severe, down 30% from a brief peak of around 676k addresses. Activity is now down to 474k addresses a day, last seen in Q1 2021.
The decline in activity was even more dramatic when it came to the dollar value of settlements on the network.The dollar value of bitcoin (change-adjusted) and ethereum (ETH transfers) settlements is down -63% and -68%, respectively, from recent highs set in May.
Bitcoin settled around $18.3 billion per day, while Ethereum’s ETH transfers settled at $5 billion per day, both showing volumes comparable to Q1 2021.
Naturally, as network congestion has almost completely cleared, the priority fee for inclusion in the next block has dropped significantly. Total fees paid in Bitcoin have fallen to just under 30 BTC/day (about $1.2 million), matching levels seen in late 2019 and early 2020.This currently accounts for around 4% of miner revenue, with block rewards accounting for the remaining 96%。
For Ethereum, daily fee income has dropped from more than 15,000 ETH/day in early May to only 1,900 ($4.34 million). This means that about 10% of the total revenue of miners comes from transaction fees. We need to go back to June 2020, in"DeFi Summer "first level title。
supply and spending behavior
From a macro perspective, there are striking similarities to the 2017 macro peak in terms of the balance of supply held by long-term (blue) and short-term (red) holders. The chart below shows the relative supply held by each cohort, and whether they are in profit (dark color) or loss (light color).
in reaching"Peak HODL"(maximum LTH supply), both cycles exhibit a macro distribution event as BTC wealth shifts from long-term holders to short-term holders. After the top, we started to see the opposite effect, with long-term holders stopping selling and starting to re-accumulate, although their coins were often caught in unrealized losses.
Since the $64K cap, long-term holders own an additional 5.25% of the circulating supply, with 1.5% of the circulating supply currently underwater (held with unrealized losses). Many long-term holders continue to HODL despite the price approaching their cost basis.
If we look at the total spending behavior over the past year, we see that young tokens (those younger than 1 year, excluding < 1 day old) continue to increase their share of transaction flow. Over the past few months, we have seen young coins account for more than 45% of the total trading volume. Most likely the result of new market entrants:
Buy at the peak of the excitement, then,
Surrender to sell in current unstable conditions.
Very low demand for on-chain settlements (generally bearish)
However, it also suggests that long-term investors will not jump out at these prices (neutral to bullish).
This metric shows that most of the current on-chain activity is due to buyers spending their tokens and taking losses over the past 6 months.
Conversely, older coins (those > 1 year old) reduced their payouts, with a notable drop after the May sell-off. This shows the two sides of an empty memory pool:
The used output age band is a particularly useful tool if the market has experienced a strong rally or further decline. One behavior to watch out for primarily is in the event of these old coins roaring to life, such as in a relief rally. If so, it could be a sign that veteran investors are exiting, entering liquidity or panic selling (bearish). If not, their tokens remain dormant during periods of volatility, which would be a strong sign that the belief held is still in play (bullish).
To demonstrate how insignificant the spending behavior of all coins is, we can look at the binary CDD indicator with a 7-day moving average applied. When the number of coin-days destroyed (CCD) is greater than the long-term average, the indicator will trend upwards. When old coins or large-scale bitcoins are transferred to the chain, more coin days are destroyed.
Binary CDD has dropped so low that only 1 in 7 days of lifetime burn is above the long-term average. This pattern lasted almost all of June and started relatively soon after the May sell-off, suggesting that veterans are unwilling to sell at these prices. This also highlights how much demand there is for block regions.
The entire market seems to be waiting for the next move, with few willing to be the firstfirst level title
Weekly feature column: Mining's seismic shift
The largest Bitcoin hashpower migration in history appears to be underway. Many miners are shutting down or moving their hashrate outside of China after some Chinese provinces officially banned mining activities.
Over the past two weeks, the estimated average hash rate (7DMA) has dropped by about 16%, from about 155 EH/s to about 125 EH/s. The hash rate has now returned to mid-2020 levels.
As the Chinese mining industry begins to grapple with the logistical challenges of relocating, relocating or selling its hardware and facilities, some may liquidate some of their accumulated bitcoin inventory.These token sales may represent miners hedging risk, accessing capital to facilitate and fund logistics, and for some miners, possibly exiting the industry altogether。
The Miner Net Change metric shows the 30-day rate of change in unused supply by miners. This shows that distribution has increased significantly over the past two weeks, often coinciding with an overall decrease in hashrate.Over the past two weeks, miners have been distributing at a rate of about 4k to 5k net per month. This has reversed the trend of net accumulation since April。
Finally, we look at holdings in over-the-counter markets, which are used by miners to match high-volume buyers with their massive supply.
During the May sell-off and over the past two weeks,Observed net inflow of 30,000 to 35,000 bitcoins. In both cases, however, almost all of the size of the inflow was absorbed by buyers in just a few weeks. Overall, total Bitcoin holdings over the counters of the over-the-counter markets we monitor have remained relatively flat since April.
