Bitcoin has started 2022 on a quiet note. With yearly gains of more than 60% in 2021, BTC emerged as one of the best performing financial assets in the global markets. However, the digital asset witnessed real growth in its network activity.
Last year, the Bitcoin network broke several records, including the total number of wallets with non-zero balances and active BTC entities. So far in 2022, the digital currency has seen a sharp drop in key network metrics and activity indicators.
Large Bitcoin addresses have started moving the crypto asset from exchanges and active wallets to cold wallets and dormant accounts. In addition, trading volumes across digital exchange have dipped significantly during the last few days.
“As 2021 wound down, so too did the activity in the Bitcoin market, with trading volumes softening and prices trading more or less sideways. Price has continued to trade in the same range since late November, bouncing between a high of $51,654, and a low of $46,197 this week. Across many on-chain metrics, there is a general lack of activity, despite a modestly bullish undertone in supply dynamics. Coins continue to migrate to increasingly illiquid and dormant wallets, whilst investor profitability and cyclical metrics paint a more bearish picture,” Glassnode noted.
Active Bitcoin Supply
The active supply of BTC is an important indicator of the overall health of its network activity. During the last 12 months, the active Bitcoin supply climbed substantially, and long-term holders decreased their spending. In some cases, large Bitcoin addresses even accumulated the digital asset.
“Long-term holders (LTHs) have spent around 150k BTC since October which is just 1.11% of their total held balance. The slow-down in spending is notable given the sharp and sustained correction during this time. Note that this also follows a massive accumulation phase in 2021, where on the net, over 2.42M BTC migrated to LTH wallets after March, a balance growth of 22.1%,” Glassnode’s report added.
