The addresses mainly run by active human traders have notched more than 147,000 addresses for the first time since November.
The market cap of Bitcoin (BTC) dropped another 33% in June, which is now beginning to numb the Twitter community. On the upside, many crypto traders who wanted out did so fairly aggressively from March to May. But, the less optimistic news is that the stagnancy in address activity may need to change for prices to get a running start on recovery.
Unlike April and May, the altcoin pack didn’t struggle tremendously more than Bitcoin. BTC’s 33% drop was pretty middle of the road in terms of corrections. In a vacuum, crypto bulls would prefer seeing altcoins continuing to lag, pushing more traders back toward Bitcoin as a relative “safe haven.”
Nevertheless, June was a tale of two halves. June 1-15 saw a massive 25% further downswing for Bitcoin. Comparatively, June 16-30 was looking up until the very end of the month, which now exhibits an additional 8% slide.
The $20,000 price level has shown to be both psychological support and resistance area. Therefore, a drop below (which could very well occur by the time this article is published) may quickly change traders’ outlook. Panic selling and overly eager buying should occur as soon as the $19,500 to $19,900 range is hit.
Social dominance has returned to Bitcoin and away from altcoins
So far, 2022 has served as a reality check for altcoins whose market caps have ballooned to astronomic levels in the past two years. As mentioned, Bitcoin was nothing special compared to alts in June, but it has held up better than most projects and even a few stablecoins. As a result, the spotlight shines bright on Bitcoin, as evidenced by a healthy community focus.
This phenomenon was reflected in the whole last week of June. Bitcoin was mentioned on Santiment’s social platforms at its highest rate in about four months, while the discussion around other popular assets like Ether (ETH) and Cardano (ADA) continues to diminish.
Trading returns still point to a major undervaluation of Bitcoin and most altcoins
The average 30-day trading returns on the BTC network are still very negative. And, as long they are in the yellow-green or green territory in the below chart, there is less risk in entering a Bitcoin position (or adding on to) than historical results.
Price freefalls tend to reverse if they go into the extreme low (green) territory, and that would be the ideal setup to watch for on Sanbase.
The number of whale addresses is growing rapidly
Another positive note for patient crypto hodlers, regardless of the asset, is that more and more Bitcoin shark and whale addresses are returning to the network. The addresses, mainly run by active human traders, sized 10 to 10,000 BTC, have over 147,000 addresses for the first time since November. Meanwhile, the very top-tier addresses owned primarily by exchanges (10,000 or more) showed over 100 addresses for the first time since December 2020.
And, speaking of supply moving on and off-exchange addresses, the overall trend shows BTC continuing to move away from exchanges after a brief worrisome rise in May. Now, well below 10% of coins sitting on exchanges, there is far less selloff risk (based on historical trends). And, to add to this, the amount of Tether (USDT) moving to exchanges has skyrocketed, implying more buying power at these suppressed prices.
Ethereum seeing far more negativity than any other large-cap asset
Not to be ignored, Ethereum has had a well-documented 76% retracement since its all-time high in November. When looking at the ratio of positive vs. negative commentary being scraped by our social data algorithm, there appears to be a stunning dropoff in positive comments in early June. The 37% price drop between June 9 and 13 was the culprit and the last straw for many traders. As counterintuitive as it may seem, these “last straws” is what the community at Santiment expects to see for the market to stage a comeback.
Cardano is also seeing the equivalent of slowly rolling tumbleweeds around its network. The number of unique addresses interacting on the Cardano network is down to its lowest in about a year. The sentiment is gradually sinking for Cardano as well, which is likely due to a simple absence of discussion more than anything.
Traders heading into the second half with extreme skepticism
It is hard for the trading community to find any excitement in the abysmal price performances that continue to persist month after month in 2022. Yet, price surges happen when the mainstream casts the most doubts. Still, nothing is for certain in a sentiment-driven and often self-perpetuating sector like cryptocurrency. But, the more the crypto community is leaning bearish and proclaiming its crypto winter time, the higher the chance of a recovery underway.
Cointelegraph’s Market Insights Newsletter shares our knowledge on the fundamentals that move the digital asset market. This analysis was prepared by leading analytics provider Santiment, a market intelligence platform that provides on-chain, social media and development information on 2,000+ cryptocurrencies.
Santiment develops hundreds of tools, strategies and indicators to help users better understand cryptocurrency market behavior and identify data-driven investment opportunities.
Disclaimer: The opinions expressed in the post are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product.