Crypto market selling pressure remains Asia dominated: Glassnode

Bitcoin network on-chain activity still appears to be in a bear market as US and EU buyers struggle to stay ahead of Asia-based sellers.

The Latest From Blockchain Analytics Firm Glassnode report on the weekly activity of Bitcoin (BTC) shows that the price of the largest crypto by market cap has remained firmly within the same tight $5,000 range from $37,680 to $42,312. However, on March 22, the asset experienced a sudden spike in price that pushed prices to a two-week high.

Overall, the network is demonstrably calm according to Glassnode's weekly review:

“Bitcoin network utilization and on-chain activity remains firmly within bear market territory, although it is recovering.”

The research concluded that there is a clear difference in the behavior of the average BTC investor based on their geography. In particular, US and EU investors have tended to be buyers, while Asian investors have tended to be sellers. This trend has been consistent since March 2020, with the exception of last November, when both sides bought heavily.

Specifically, the Glassnode researcher and writer of the "Checkmate" report noted that US and EU investors have offered general support for offerings over the past two years with heavy buying between late 2020 and early 2021, while that "both regions capitulated between May and July". EU buyers currently provide the most support.

In the course of this #bitcoin Reduction, the buying pressure has been mainly during the US and EU trading hours.

Meanwhile, most of the selling pressure has come during Asian market hours, suggesting a divergence in regional strategy.

Read morehttps://t.co/cyTLZGHR1u pic.twitter.com/mJGGloo1t4

- glass node (@glassnode) March 21, 2022

Conversely, Glassnode reported that Asian markets have generally offered lower buying support during the first and third quarters of 2021 and are currently producing strong selling pressure. However, on March 22, the co-founder of crypto investment firm Three Arrows Capital Su Zhu tweeted “Asia unironically offers BTC high,” suggesting that the day’s short-term price rise was led by Asia-based traders.

Various on-chain metrics suggest a bear market is underway. The number of new entities, or new wallets that are not associated with existing wallets, has seen a gradual increase since mid-2021. This is a bear market pattern that similarly played out from January 2018 through the first half of 2020. Currently, about 110,000 new entities are created on the Bitcoin network per day.

In a bear market, the growth of new entities increases slowly and steadily. In bullish periods, the growth of new entities experiences large spikes such as in January 2018 and January 2021.

Transfer transaction volumes valued at more than $1 million have followed the sharp downward trend since peaking last November. Glassnode warned that "a severe drop may indicate a reduction in network utilization," further indicating that we have entered a bear market.

Related: Bitcoin 'Could Easily See $30K' With Stocks Due To 30% Drawdown In 2022 - Analyst

As reported last week, long-term holders (LTHs) have increased selling pressure, but overall LTH supply has remained stagnant because an equal proportion of short-term holder (STH) supply has been converted, and that trend continues. The LTH supply consists of coins that have not moved for at least 155 days.