Bitcoin Utility Grows as the Market Dumps while Luna Crumbles by -99.99%
It's that point in the market where development and utility strive while prices plummet.
LUNA, the native token for Terra blockchain crashed -by 99.99% as the blockchain project with one of the strongest and most innovative communities faced one of the most significant meltdowns in the industry’s history. Many investors, VCs and the likes have recorded historic losses and are still licking their wounds. The crypto market dropped sharply as well with Bitcoin testing the lower waters at $27k. The market has been bleeding but on-chain data shows that the current bear market cycle is unique as Bitcoin’s peer-to-peer transactions increase outside the realm of exchanges.
One of the principal aspects of on-chain analysis is to examine and compute live data and transactions over the network. Unlike exchange-involved transactions which often lead to price volatility, transactions outside of exchanges (peer-to-peer) demonstrate the network’s utility as possible payments among users. It makes a positive contribution to the development of the network over the long term if users interact with one another. Therefore, it is essential to examine the number of transactions of a digital asset over the network.
The number of transactions within exchanges’ wallets has been trending lower from the May 2021 peak meaning that there is low exchange activity by traders and not much transfer activity through the marketplace. This is different from the previous price cycles when this number was strongly correlated to the price action.
Meanwhile, the total number of deposits and withdrawals to and fro exchanges has plunged downwards, demonstrating that people may be less engaged in the exchanges. Additionally, the number of transactions from all exchanges to derivatives exchanges have plummeted as a clue that derivatives trades are not very attractive meaning leverage trading has reduced significantly.
In the meantime, there is no further possibility of cumulative selling pressure due to the substantial drop in the number of transactions from all exchanges to spot exchanges. This offers the slightest of encouragement and mitigates bearish sentiment among investors and holders.
Concurrently, the sum count of on-chain transactions has moved up in contrast to the downtrend in exchange-related transactions. It implies an increased supply/demand outside of exchanges, resulting in high usage of the Bitcoin network. With more crypto adoption coming, we might see more on-chain Bitcoin activities in the coming days/ weeks/ months and more stability in price.
#crypto #bitcoin #ethereum #trading #anypad #blockchain
As written by Niranjan Duguta
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