According to blockchain analytics company Glassnode, so-called “market tourists” are quitting Bitcoin (BTC), leaving only long-term investors keeping and using the leading cryptocurrency.
The number of wallets holding at least some of the assets continues to increase, while the number of active addresses, entities, and transactions on the Bitcoin network are all heading downwards.
According to Glassnode analysts’ July 4 Week Onchain analysis, June was one of Bitcoin’s worst-performing months in 11 years, with a loss of 37.9 percent. According to the article, Bitcoin network activity is at levels that coincide with the worst of the bear market in 2018 and 2019.
“The Bitcoin network is approaching a state where almost all speculative entities, and market tourists have been completely purged from the asset.”
Glassnode noticed strong accumulation levels despite the nearly complete purge of “tourists,” noting that the balances of shrimps—those holding less than 1 BTC—and whales—those holding 1,000–5,000 BTC—were “growing meaningfully.”
Particularly shrimps find the present Bitcoin rates attractive and are acquiring it at a rate of roughly 60,500 BTC per month, which Glassnode claims is “the most aggressive rate in history,” or 0.32 percent of the monthly BTC supply.
In order to explain the removal of these “tourist” investors, Glassnode disclosed that since November 2021, both the number of active addresses and companies have decreased, suggesting that both new and existing investors are not engaging with the network.
Over the previous week, address activity has decreased from over 1 million active addresses per day in November 2021 to about 870,000. In a similar vein, the number of active entities—a collection of various addresses owned by the same person or organization—is currently about 244,000 per day, which, according to Glassnode, is at the “lower end of the ‘Low Activity’ channel characteristic of downturn markets.”
“A retention of HODLers is more evident in this metric, as Active Entities is generally trending sideways, indicative of a stable base-load of users,” the analysts added.
With the user base of Bitcoin reaching 7,000 daily net new entities, the growth of new entities has also plummeted to lows from the 2018 to 2019 bear market.
The transaction count is still “stagnant and sideways,” which denotes that there isn’t any new demand but also that holders are still being kept around due to market dynamics.
Glassnode came to the conclusion that the number of addresses with a non-zero balance, or those that contain at least some Bitcoin, is currently sitting at over 42.3 million addresses, which is an all-time high.
When the price of Bitcoin fell during bear markets in the past, wallets were cleaned out. However, Glassnode claims that despite this measure suggesting differently, it demonstrates a “growing level of resolve amongst the ordinary Bitcoin participant.”
