Many key crypto market indexes have fallen over the past few weeks and the month of May brought historically large declines for most on-chain indices, according to on-chain activity and stream data. digital assets. That said, new entrants are still selling, while long-term investors continue to accumulate.
And although Bitcoin still seems to be a cautious cryptocurrency for investors, ETH and altcoins are still popular choices.
Bitcoin Crypto Market Signals Down Against ETH and Alcoins
In the latest Digital Asset Find Flows Weekly report, Coinshares said $94 million left digital asset investment products last week. Additionally, the weekly BTC investment product trading volume has dropped by 62%.
The report said bitcoin outflows totaled a record $141 million last week and equates to 8% of net inflows this year. However, they are still minimal in terms of relative terms compared to capital outflows in early 2018.
In contrast, ETH continues to be a popular choice among investors, as the asset has seen a net inflow of $33 million.
Meanwhile, XRP investment products added $7 million, while cardano (ADA) added $4.5 million.
Crypto Market Signals Down But Long-Term Investors Still Accumulating
A report by crypto online chain analysis firm Glassnode notes that the supply held by long-term holders is continuing to accelerate upwards, while new entrants are dropping their coins. them with losses “much larger than the average market”.
According to the report, “the market remains uncertain,” following a massive drop in on-chain activity, payment volume, and transaction fees, for both BTC and ETH, bringing them back to 2020 and early year levels. 2021.
“According to most on-chain performance indicators, recent months have been one of the biggest declines in history, with a rapid transition from booming chain economies at ATH prices. [cao nhất mọi thời đại], to almost completely clear mempools and waning demand for transactions and payments . “
Glassnode also states that during the recent sell-off, the Bitcoin network saw an 18% drop in active addresses from its recent ATH of 0.94 million, along with a 33% drop in active entities, from 375,000. down to 250,000.
Furthermore, the volume of USD transfers paid through the Bitcoin network has dropped 65% in the past two weeks. As with the others, this one is similar to the 2017 bear market, Glassnode notes, when online payment volume dropped 80% in 3 months.
Ethereum-USD remittance volume has dropped over 60% in the past two weeks, compared to -95% in 2018.
The drop in on-chain activity has also resulted in a significant reduction in network fees for both blockchains, back to mid-2020 levels, Glassnode said. Yesterday, Bitcoin’s average transaction fee was $1.72, while Ethereum’s was $2.30, according to BitInfoCharts.com.
When it comes to supply dynamics, only 22% of all BTC acquired over the past 14 months has been sold.
“744k BTC has been withdrawn into cold storage (or equivalent) over the past 14 months, 78% of which remains unspent despite this recent volatility,” the analysts said.
Additionally, ETH has surpassed BTC volume on most major exchanges. However, according to crypto intelligence firm Coin Metrics, BTC still leads on the Chicago Mercantile Exchange (CME), a preferred destination for institutional investors.
“CME only introduced ETH futures in February but they have gained momentum since then. While it appears that retail investors trading on exchanges like Binance and Coinbase have favored ETH in the last month, it appears that institutional investors are still favoring BTC,” Coin Metrics said. know in their latest report today.
Meanwhile, a recent survey conducted by Goldman Sachs shows that institutional investors are not interested in investing in bitcoin.
During two CIO (chief information officer) roundtables, attended by 25 CIOs, the survey found that their least favorite investment was bitcoin. 35% of respondents said BTC is their least favorite, followed by new initial public offerings with 25% and a sensitivity rate of 20%.
In addition, Bank of America’s global fund manager survey found that 43% of investors surveyed said long bitcoin was the busiest trade in May.
It seems that despite the market decline, the long-term investors kept their HODL strategy while the new entrants rushed to sell at a much greater loss.
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