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Bitcoin: on-chain data surprises retail traders

Rising prices earlier this week rekindled hope for supporters of digital assets. Many saw the rebound in the last week of October as one of the indicative signs that the "cryptocurrency winter is probably thawing." Cryptocurrencies, in line with the performance of NASDAQ technology stocks, have suffered amid tighter monetary policy by the Federal Reserve to suppress inflation. But interest in the crypto sector still seems to remain low. The main reason precisely lies in the fact that the decentralized landscape seems for all intents and purposes less profitable than in previous years.

On-chain Analysis: Glassnode Data

The percentage of Bitcoin in holdings for over a year is at an all-time high reaching a record 66 percent. More than a quarter of the total supply does not seem to want to move off the blockchain at all and has been technically locked for more than five years.

This is certainly a particularly good thing for the industry as it means that there is less and less BTC available in the market. According to the supply and demand mechanism, this should stimulate the price by creating a deflationary environment that can only benefit the market. An increase in the percentage of Bitcoin in holdings likewise indicates that despite recent slumps, the confidence of its investors remains high.

On the other hand, the drop in derivatives volumes coupled with a drop in spot volumes and low levels of search on the Google browser suggest that retail traders have preferred to leave the market, albeit temporarily as it is much less directional than in the past.


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