- Bitcoin’s address activity spiked to its highest level in six months with more supply outside of exchanges
- Interest in the derivatives market was low despite signals that BTC could be close to the bottom
The impact that the FTX contagion had on Bitcoin [BTC] still seemed to be visible weeks after investors bid their assets goodbye. Besides BTC’s price collapsing below $16,000, a number of investors now seem to have opted for Decentralized Exchanges (DEXes).
Read Bitcoin’s [BTC] Price Prediction 2023-2024
In another scenario possibly impacted by the incident, Bitcoin’s address activity hit a six-month high. According to Santiment, Bitcoin achieved the milestone over the weekend. A look at the data showed that the BTC daily active addresses reached 1.1 million on 20 November. This implied that several unique addresses deposited the coin during that period.
Where is the party at?
Furthermore, it appeared that many investors made their word bond in moving assets outside of centralized exchanges. This was because the supply outside of exchanges clearly surpassed the exchange inflow. Santiment’s data revealed that the supply outside of exchanges was 17.93 million at press time.
A close examination showed that the metric significant increase began around the time the FTX issue occurred. Hence, it was likely that the address activity spike was an outcome of this movement.
In contrast, the exchange inflow recorded decreased over the last few days. The last increase registered per inflow was on 17 November when it was 253,000. This implied that CEXes had not regained a vote of confidence from investors, notwithstanding low selling pressure.
On other fronts, traders looked to be avoiding pairs with BTC. This was because the Bitcoin options’ open interest had dwindled, based on Glassnode data.
This further proved the point that the scare around depositing exchange was still alive. Additionally, the decrease meant that options contracts were starved of volume, indicating less interest in the coin.
Perilous times are here for BTC
Besides the factors mentioned above, investors might need to watch their action on accumulation. This was because the circulation Network to Value (NVT) was at high value. At press time, the circulation NVT had increased up to a value of 239.
It implied that network value was outperforming the circulation using the 90-day moving average. For this reason, it could be possible for BTC to lose its grip on $16,100. However, it was possible the drop might not be very significant due to the revelation by the Market Value to Realized Value (MVRV) z-score.
According to Santiment, the MVRV z-score was at an extremely low value of -0.247. The implication of this position was that BTC was undervalued and a further down path could be beyond the question.