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Is Bitcoin losing its momentum?

2min Read

Bitcoin’s momentum wanes as wallet growth slows, impacting market dynamics. A declining mean transaction size and bearish trader sentiment has contributed to a cautious market outlook.

Is Bitcoin losing its momentum?

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  • Bitcoin showed reduced wallet growth and declining mean transaction sizes.
  • Traders have turned bearish, and implied volatility has decreased, suggesting a period of caution in the market.

Bitcoin [BTC] continued testing the patience of its holders, as it meandered around the $25k-mark at the time of writing. Moreover, recent data suggested a slowdown, adding to the king coin’s descending momentum.

Read Bitcoin’s [BTC] Price Prediction 2023-2024

Stepping on the brakes

One significant indicator of this slowdown was the overall relative change in Bitcoin wallets over a 30-day period. Although wallets were still expanding, their growth rate had decreased, particularly among those holding 10 – 10,000 Bitcoins.

These larger cohorts tend to have a more pronounced effect on market dynamics.

Thus, Bitcoin’s declining momentum could impact its performance and investor sentiment. Slower growth may discourage new investors and speculators, potentially leading to stagnation or a drop in the coin’s price.

Source: Santiment

Another concerning sign was the mean transaction size of transactions. As per Glassnode, Bitcoin’s mean transaction size, when averaged over seven days, reached a one-month low of 518.646.

This drop in mean transaction size usually means reduced activity or a shift in the type of network transactions.

Bitcoin also faced challenges in the NFT sector. Notably, activity across all major exchanges related to Ordinals declined, reflecting a broader trend of waning enthusiasm.

Source: Dune Analytics

How are traders doing?

Traders have turned bearish on Bitcoin, as indicated by the rising put-to-call ratio. This ratio grew from 0.42 to 0.47 in recent weeks.

A higher put-to-call ratio suggested that more traders were betting on a decline in Bitcoin’s price rather than its rise, reflecting a shift in market sentiment towards caution.

Source: The Block

Is your portfolio green? Check out the BTC Profit Calculator

Additionally, the implied volatility for Bitcoin also fell over the past few months. Implied volatility measures the market’s expectations for future price fluctuations. A decrease in implied volatility suggests that traders anticipate a period of price stability or predictability.

While this can be seen as a positive sign for some investors, it may also indicate a lack of speculative interest, potentially contributing to Bitcoin’s unassuming price range.

Source: The Block


Himalay is a full-time journalist at AMBCrypto. A Computer Science graduate, Himalay writes about crypto with a special focus on the latest coin-based updates. He is a fan of gonzo journalism, transgressive fiction, heavy metal, and Manchester United.
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