Journalist
Posted:
- Bitcoin showed reduced portfolio growth and declining average transaction sizes.
- Traders have turned bearish and implied volatility has decreased, signaling a period of caution in the market.
Bitcoin [BTC] continued to test holders’ patience as it hovered around $25,000 at the time of writing. In addition, recent data indicated a slowdown, adding to the declining momentum of the king coin.
Read Bitcoin’s [BTC] Price forecast 2023-2024
Step on the brake
One significant indicator of this slowdown was the overall relative change in Bitcoin wallets over a 30-day period. While the wallets were still growing, their rate of growth had slowed, especially among those holding 10 – 10,000 Bitcoins.
These larger cohorts tend to have a more pronounced effect on market dynamics.
Thus, Bitcoin’s declining momentum could impact its performance and investor sentiment. Slower growth can discourage new investors and speculators, potentially leading to stagnation or a fall in the price of the coin.
Source: Sentiment
Another worrying sign was the average transaction size of trades. According to Glassnode, Bitcoin’s average transaction size, averaged over seven days, reached a one-month low of 518,646.
This drop in average transaction size typically means reduced activity or a shift in the type of network transactions.
📉 #Bitcoin $BTC Average transaction size (7d MA) just hit a one-month low of 518,646
The previous one-month low of 518,770 was observed on August 21, 2023
View statistics:https://t.co/PJ0bkLTuVs pic.twitter.com/iOHcHxSJqN
— Glassnode Alerts (@glassnodealerts) September 5, 2023
Bitcoin also faced challenges in the NFT sector. In particular, activity on all major exchanges related to Ordinals declined, reflecting a broader trend of declining enthusiasm.
Source: Dune Analytics
How are traders doing?
Traders have turned bearish on Bitcoin, as evidenced by the rising put-to-call ratio. This ratio has increased from 0.42 to 0.47 in recent weeks.
A higher put-to-call ratio suggested that more traders were betting on a decline in Bitcoin’s price rather than an increase, reflecting a shift in market sentiment toward caution.
Source: The Block
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In addition, implied volatility for Bitcoin has also declined in recent months. Implied volatility measures the market’s expectations for future price movements. A decrease in implied volatility indicates that traders expect a period of price stability or predictability.
While this could be seen as a positive sign for some investors, it could also indicate a lack of speculative interest, which could potentially contribute to Bitcoin’s modest price range.
Source: The Block