Glassnode suggested that bitcoin is in the deepest bear market territory as network activity has dropped due to a shortage of new users.
Confirming that June was the worst month of bitcoin trading in more than a decade, the analytical resource Glassnode suggested that the bottom may be close, as the so-called "market tourist" fled the scene. However, the company's latest report warns that this cycle may change due to external economic pressures.
Although April and May were not very good for the main cryptocurrency either, the asset still entered June at a price above $ 30,000. In fact, it cost just over $32,000 (on Bitstamp).
It has already lost about 40% of its value since its annual peak at the end of March, but the situation worsened in the next 30 days amid the ongoing market collapse. When crypto lenders stopped withdrawing funds and hedge funds became insolvent, a shock wave swept over all cryptocurrencies, including the largest one.
Bitcoin plummeted to an 18-month low in the middle of the month at $17,500. Although it recovered a bit over the next few weeks, June still ended up at just under $20,000.
This meant that bitcoin completed its worst quarter in terms of price movements in the last ten years. Moreover, June turned out to be the most turbulent trading month since 2011, as described by Glassnode in the latest report:
"Prices have fallen by 37.9% in the last 30 days, competing only with the bear market of 2011, for the crown of the worst month in history."
Against the backdrop of this sharp decline, Glassnode noted that the so-called "market tourists" had gone. The company believes that such investors appear during the rise of the market and increasing network activity. However, this has not been the case in the last few months.
"Almost the entire set of indicators of online activity shows that the number and activity of network users are approaching the deepest historical bear market. The Bitcoin network is approaching a state where almost all speculative entities and market tourists are completely excluded from the asset."
At the same time, Glassnode said that long-term holders remain, who are generally known for their "high accumulation of beliefs and self-storage."
Ross Mayfield, an investment strategy analyst at Baird, agreed with Glassnode's suggestion that the bottom could be close, at least according to online data and investor behavior. However, he believes that BTC still has a chance to move further south due to the macroeconomic situation in terms of a possible recession and the Fed's continued interest rate hike.