New research shows that Bitcoin (BTC) is in a "terrible state" in adoption — but a glimmer of hope is already visible.
cryptographic analysis company Glassnode said in its latest weekly newsletter, Week On-Chain, that Bitcoin is undergoing a "big detox".
Bitcoin Adoption Rate Return March 2020
The current BTC price trend is putting pressure on everyone from long-term holders (LTH) to miners and it is difficult to alleviate.
Macro turmoil and $20,000 resistance keep BTC/USD at a level that has only been visited once since 2020.
As it breaks through $20,000 this week and shows significant profit-taking, the market still warns that the market will face more pain first before the recovery.
For Glassnode, the continued decline is causing a drastic change in the image of Bitcoin investors, with retail investors and speculators—the so-called short-term holders (STHs)—being kicked out now.
It concluded: "As the level of network adoption drops to the last level during the COVID crisis, network activity is still in a terrible state."
"However, a constructive observation is to expel retail participants from the network, leaving only the HODLers class, professional traders and everyday Bitcoin users. This suggests that the user base is at the base level."
1 faces flattened on-chain adoption, and this reset of network composition can provide positive nuances.
As Cointelegraph reported this week, LTH is notorious for its stubbornness during the bear market, and data shows they are not in the mood for sale.
"The HODLer class remains unwavering, mature tokens dollar wealth reaches ATH, and many lifespan indicators are completely reset to historical lows, emphasizing unwillingness to spend tokens held," Glassnode continues to quote its latest data analysis.
"This shows that the majority of the current market loss is related to the short-term holding category."
"large supply air gap" threatens $12,000
Although LTH is becoming increasingly common as an investor majority, STH may still create some huge downside if Bitcoin falls below the $17,600 macro low in June this year.
Glassnode explains that this is due to the volume gap below that level – meaning any sell-off can easily snowball into the next bid area, which is currently $12,000.
"At the $11,000 to $12,000, the supply gap is significantly lower than $18,000," Week On-Chain said elsewhere.
"Trading below the current cycle lows will put a large number of short-term holder tokens into serious unrealized losses, which may exacerbate downward reflexivity and trigger another widespread surrender event." The chart accompanying
shows the lack of volume between the two price zones, which is in stark contrast to the area around $20,000 now full of STH interest.
Meanwhile, macro factors have mainly contributed to other warnings about the stability of BTC prices in recent weeks and months, with forecasts including BTC/USD falling below $10,000 .
