The cryptocurrency market is mired in a depression. Along with the fall in on-chain activity, the volatility of bitcoin also fell. The decline in network activity is worrying in terms of Bitcoin’s growth, analysts say.
Negative social sentiment for Bitcoin is gaining momentum as cryptocurrency volatility falls.
The cryptocurrency community is overwhelmingly skeptical about a market recovery. This is the conclusion reached by Santiment analysts after studying the on-chain and off-chain activity of bitcoin. It is reported that most investors are completely disillusioned with the cryptocurrency.
The frequency of messages with the words “bear” and “bearish” is on the rise again on social media. Analysts point out that high social volumes and extremely optimistic sentiments, as a rule, were not a catalyst for sustained price increases.
Thus, Crypto-Auditor sees pluses in the negative sentiment of the cryptocurrency community.
However, traders are of a different opinion. For example, the bitcoin funding rate on BitMEX does not remain in the neutral range at 0.01%.
However, analysts admit that over the past few hours, the rate on other exchanges has begun to gradually decline. In general, Bitcoin’s off-chain indicators signal a completely “depleted market”, experts state.
The decline in interest in bitcoin is also indicated by the reduction in the number of unique addresses in contact with bitcoin. So, since last Monday, the number of addresses interacting with bitcoin has decreased by 28%. Like off-chain indicators, network signals are showing growing “paralysis” among traders, Santiment notes. This attitude continues to cause concern in terms of Bitcoin’s growth, analysts say.
Meanwhile, the annual indicator of market value to realized (365-day MVRV) hit a low. So, at the time of this writing, its indicators are -14.9%. Despite the favorable moment to enter the market, analysts remind that on average the indicator formed a bottom in the range from -25% to -35% before the market began to reverse.