The recovering market is slowly losing strength since the overall crypto market led by virtual currency Bitcoin has barely made any difference over the past seven days.
Bitcoin is on the rise
Last week after Bitcoin dropped more than 13% in just a few days, some glimmers of hope appeared in the form of a short-term rally of 5.67%.
Soon after, Bitcoin fell again. And, as of Jan 14, it’s only 1.37% away from reaching the same $41.5k as it was on Jan 7th.
The growing concern is not only based on the fact that Bitcoin is repeating the price levels, this concern is born from the fact that even the indicators are signaling red candles.
The strength of the downtrend is so active that even the bulls can best keep BTC consolidated.
Bitcoin price action | Source: TradingView – AMBCrypto
The second week of 2022 marked the highest outflow observed in more than a year, totaling $207 million in digital investment assets. Outflows were led by nothing other than king coin as Bitcoin recorded a net outflow of negative $107 million.
Net flow of crypto assets | Source: CoinShares
Next is Ethereum with – $39 million, still only a third of Bitcoin outflows.
In any case, investors don’t seem to mind these developments, neither positive nor negative. The number of addresses already active on the chain continues to stagnate at 950k and the network can manage to add just 200k new investors in just over a week.
Bitcoin active address | Source: Intotheblock – AMBCrypto
Obviously, this is not a good sign, as in the case of Bitcoin lacking DeFi, its investors are its only strength. And, if their support is lost, a quick recovery is difficult.
However, one positive observation is – BTC has not lost its HODLers. Selling has been minimal, and over 400k mid-term holders HODLed their BTC into long-term holders this month.
Bitcoin Long-Term Holders | Source: Intotheblock – AMBCrypto
But the king’s money cannot depend only on this crutch. The market needs to maintain a net flow close to neutral or positive, only then is it likely that Bitcoin can challenge the next drop.