With the crypto market undergoing price correction, the top two cryptocurrencies Bitcoin and Ethereum saw slight gains. BTC is up by 0.56% in the last 24-hours and is trading at $39,587, while Ether is changing hands at $2,924 after having gained 1.28%.
Bitcoin is still far from the highs of the $40,000 – $45,000 mark. Analysts believe the cryptocurrency’s weakness is exacerbated by institutional investors exiting futures markets. But, on-chain data suggests that BTC is in an early bottoming process. Analysts say a drop in inflows and the pivot from institutional investors are the main factors impacting the popular digital asset’s price action.
According to Glassnode, Bitcoin derivatives represent the dominant venue for price discovery with the future trade volume highlighting multiples of spot market volume. This has significant implications for the current price action for Bitcoin as the futures trade volume has been on a decline since January 2021. The analyst firm outlined that the current open interest in perpetual swaps is equivalent to 1.3% of the Bitcoin market cap – approaching historically high levels.
Despite Bitcoin’s 40% price dip from the November peak of around $69,000, activity on the popular cryptocurrency’s blockchain continues to hold up. Analysts say the number of active addresses has not surpassed the peak of May 13 of 2021 when Bitcoin was trading at around $49,700.
The altcoins continue to give a mixed reaction as many coins remain in the red. Avalanche is down by 3.66% in the last 24-hours. It lost 12.48% of its value in the past seven days. Terra LUNA lost nearly 4%, while Solana and Ripple’s XRP are down by 1.45% and 1.22%, respectively.