TitanSwap Monthly Report May
After the LUNA event and the massive sell-off in early May, some loyal BTC holders still kept their confidence. They are more determined to accumulate and buy despite the progressively lower market price. An analysis of the account statistics on the chain reveals that those entities with account balance less than 100 BTC and those with account balances greater than 10,000 BTC (although these addresses may belong to exchanges) have been playing an important role as accumulators, while the remaining group of wallets has also transitioned from the role of net sellers to neutral. This phenomenon reflects the uncertainty of the market and the rotation of capital.
Meanwhile, activity on the chain remains very weak. Outside of existing accumulators, there is little sign of outside capital interest and desire to enter, which means that existing accumulators are willing to double their purchases as the BTC price falls, and are unwilling to sell their bitcoin holdings even at a loss.
The Persistence of BTC Accumulators
Recently, a typical feature of bear markets can be learned by observing the stability of Bitcoin’s on-chain activity, which is dominated by holders who are very insensitive to price. As you can see from the chart below, wallet growth has been nearly suspended in the short term due to the recent poor performance of the cryptocurrency price. If we look at the historical perspective and past experience, volatile events such as LUNA trigger sell-offs, where investors sell in large quantities due to panic or otherwise move BTC to replenish margins and cover positions, which in turn can see a rise in the number of on-chain activities, as happened in March 2020 and November 2018 after the sell-off that started the subsequent the bull market. While this is not ruled out, the difference between this time and the past is that the active addresses and entities have retracted all of the rising activity, meaning that the low price of the recent sell-off has not inspired an influx of new users, at least not yet, and only the holders themselves have stayed.
Bitcoin’s on-chain activity has been stable since September 2021, and so far there is little indication that this process will change. This means that the holder class is the last and only buyer of bitcoin. This can be observed in the supply indicator of unwillingness to sell: holders are still willing to hold even if they are now at a loss.
After the LUNA-induced sell-off, the trend of accumulation on the chain has changed significantly. Entities with balances of less than 100 Bitcoins appear to have absorbed the coins sold by Luna Foundation Guard during the distress. In addition to most long-term holders, more and more Bitcoins are being held and purchased at much lower prices. If this trend continues, one can expect the supply of long-term holders to reach a new all-time high in the coming months.
By focusing on the macro environment that Bitcoin is in, there are signs of decoupling between digital assets and stocks. Whether it will recover remains to be seen, and with the ultimate direction of the market’s response to the monetary tightening, the risk of massive scale remains. What is breathtaking, however, is that the price-insensitive nature of bitcoin holders remains intact.
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