Recent on-chain data from Glassnode has shed light on the sentiment of Bitcoin investors, showing their doubts regarding the cryptocurrency’s short-term prospects. The declining exchange-related on-chain volumes indicate a cautious approach among market participants. This lack of conviction in the short term is evident as exchange-related on-chain volumes have started to dwindle. Centralized exchanges remain the primary venue for speculation activity and price discovery, making it crucial to monitor on-chain volumes across these platforms to gauge investor activity and speculation appetite.
An analysis of the 30-day/365-day momentum crossover for exchange-related inflows and outflows has revealed that the monthly average volume has significantly fallen below the yearly average. This decline points towards a drop in investor demand and a decrease in trading activities by speculators within the current BTC price range. The diminishing volume coincides with a slowdown in settlements on the Bitcoin network, which is currently processing around $6.2 billion worth of transaction volume per day. However, the settlement volume is decreasing towards its yearly average, indicating a cooling off of network usage and throughput.
The CVD indicator, reflecting the net balance of market buying and selling pressure on the spot market, has shown an increase in investor sell pressure over the past 90 days. This trend contributes to the downward price trajectory of Bitcoin. Despite the bearish metrics, Glassnode highlighted that the Bitcoin Hash Rate is steadily approaching new All-Time Highs (ATHs), showcasing the growing competitiveness of the mining landscape and miners’ confidence in the Bitcoin network. At the time of writing, BTC had declined by 1.21% in the last 24 hours to $56,119.
The current on-chain data analysis indicates a lack of conviction among Bitcoin investors in the short term, reflected in declining exchange-related on-chain volumes. The drop in investor demand and reduction in speculators’ trading activities within the current BTC price range add to the negative sentiment. However, the increasing sell pressure and slowdown in network settlements are contributing factors to the downward price trend. Despite these challenges, the approaching new ATHs in the Bitcoin Hash Rate signal a positive outlook for the network’s competitiveness and miners’ confidence.