The collapse of a number of projects led to a full-scale sale of cryptocurrencies and a threefold reduction in the market. Among investor groups, the largest outflow is recorded among institutional investors (companies with investments of $ 1 million or more), public miners (who expanded production on credit) and speculators. However, there are also those who have reached historical highs in accumulation.
The crisis in the cryptocurrency market has led to a decrease in the number of active addresses on the Bitcoin network from a peak of 1.2 million in May 2021 to the current 0.9 million. The growth rate of the number of participants has decreased to the anti-records of 2018-19 and does not exceed 7 thousand new users per day.
The departure of speculators and random players demonstrates a decrease in the share of exchange transactions in the total volume of transactions. During the periods of crisis following the rally, the share of exchange transactions reached 94% in February 2018 and 80% in May 2021. Now the indicator has returned to the level below 50%.
In addition to speculators, public mining companies and institutional investors have been putting serious pressure on the price over the past two months. So, in May, public miners sold more coins than they mined in a month to cover operating expenses and pay interest on loans. And in June, institutional investors withdrew a record $188 million from crypto funds due to the tightening of the Fed’s monetary policy and the increasing risk of recession.
Falling prices led to a liquidity crisis and the collapse of a number of crypto projects. The fear of a further collapse caused an increased withdrawal of Bitcoin to cold wallets. Over the past three months, the outflow amounted to 143 thousand BTC, as a result, the total balance of operators decreased to 2.4 million BTC.
The best accumulation dynamics are demonstrated by whales (>10 thousand BTC) and shrimps (<1 BTC), and the appetite of shrimps has reached a historical maximum of 60 thousand. BTC per month. The rate of replenishment of wallets exceeds the previous record set in December 2017. Whales have reached an absorption rate of 140 thousand. BTC per month, but the indicator has not yet exceeded the maximum of the bull run of 2021.
The Bitcoin level of $20 thousand by whales and shrimps is estimated as very significant.
If public miners did not have an urgent need for cash, they would similarly refuse to sell in favor of accumulation. However, it should be borne in mind that the macroeconomic situation remains negative, and the Fed will continue to tighten monetary policy during the year.