Bitcoin (BTC) network activity, like its price decline, is also hitting multi-year lows as the current crypto winter continues. According to Glassnode’s on-chain data, the total number of exchange deposits (7-day moving average) hit 2,013 on July 12, the lowest level since July 2020.
The number of Bitcoin exchange deposits has been on the decline since it hit a peak of almost 5,100 in May 2021. In about 14 months, the total amount had plummeted by more than 60%. Bitcoin’s value has fallen over 70% during the most recent crypto winter.
On July 13, 2022, the global cryptocurrency market capitalization was $421 billion, the lowest level in 8 months. The total number of active Bitcoin addresses has dropped in recent market downturns.
In the last several months, retail and institutional interest in bitcoin and other cryptocurrency assets has waned. According to CoinShares’ weekly digital asset fund flows report, Bitcoin investment products attracted outflows of $1.7 million last week.
The worldwide value of Bitcoin assets managed by custodian firms has dropped to $24.6 billion today, down from almost $50 billion in November 2021.
Bitcoin supply in losses
On Wednesday, BTC didn’t rise above $20,000 in value. A significant amount of short- and long-term supply is now facing enormous unrealized losses amid BTC downward price swings since November 2021.
“The current market structure has many characteristics of a bear market, when the most confident groups, long-term holders, and miners are forced to sell. The quantity of supply presently stands at 44.7 percent loss, with the majority coming from the Long-Term Holder category. However, this is still at a lesser degree than previous bear cycles,” Glassnode said in its weekly on-chain analysis.
The number of active bitcoin addresses dropped by 13%
In November 2021, the total number of active BTC addresses daily reached nearly 1 million. According to Glassnode’s weekly on-chain analysis report, the current figure is about 870,000 per day, down by almost 13% in the previous seven months.
During that time, the price of Bitcoin has dropped by more than 70%. The total number of BTC addresses in loss hit an all-time high of 18.96 million on July 5, 2022, during the crypto market correction and a significant drop in network activity.
“BTC address activity has dropped by 13% from over 1 million per day in November to just 870,000 per day today. This suggests that new users are barely increasing, if at all. On-chain activity is remarkably subdued, and it’s difficult to argue otherwise.
Over the last year, most of the marginal buyers and sellers appear to have finally conceded and been removed from the network. Because there are few new entrants into the Bitcoin demand side, prices are resuming their decline until these HODLers can set a floor.” Glasnode’s study explains.
A massive increase in the number of old BTC has been observed, with Bitcoin addresses that have been inactive for more than 10 years now reaching a record high of 2.46 million, according to Finance Magnates.
Bitcoin exchange flows
In recent weeks, whales have moved their BTC assets to crypto exchanges to take advantage of the bearish market conditions, as the overall BTC exchange balance hit its lowest level in approximately 48 months.
Large-scale net withdrawals continue to be recorded in the exchange reserves, with aggregate balances declining to levels not seen since July 2018. Since March 2020, the overall balance on Exchanges has been -750k BTC.
According to a report, the cryptocurrency market saw record-breaking bitcoin withdrawals in the fourth quarter of last year. A total of 142.5k BTC was withdrawn over three months, or 18.8 percent of the entire supply, it added.