The global market cap is struggling to sustain above $1.1 trillion as the top 2 cryptos, Bitcoin and Ethereum constitute more than 80% of the market cap and maintain sluggish behaviour. No sooner than the SEC sued Binance for violating the US rules, the market collapsed significantly and the aftermaths of the event continue to be seen to date.
Ever since the markets witnessed a series of fallouts in 2022, Bitcoin’s volatility has reduced to a large extent. The bulls continue to manifest being uncertain of the upcoming rally and hence continue to maintain sluggish behaviour. This has further impacted the entire crypto space which closely follows the BTC price action and also maintains a choppy behaviour.
So, how long will the BTC price remain sluggish?
Bitcoin’s daily active address was largely hovering around 1 million for almost a year which witnessed a steep fall in the first few days of May. This indicated a sudden drop in the user activity which also compelled the price to drop notably. However, the DAA count recovered within no time and the levels soared from 550 million addresses to the present levels around 1 million.
Secondly, the supply of exchanges also plays a major role in determining the sentiments of the market participants. A dropped supply, although signifies dried liquidity on the platforms, also indicates bullish market sentiments. The traders continue to hold their assets in their wallets instead of exchanges for long-term profits. Besides, a rise could have indicated traders preparing to liquidate the assets for short-term profits.
Lastly, the miner’s revenue is rising since the beginning of the year. It is nothing but the revenue earned by the miner after removing all the expenses. If the BTC price is plunging or maintaining a descending trend, the cost of mining a BTC may soar high. This could be when the revenue drops which may compel the miners to liquidate their rewards or BTC to compensate. As they store huge BTC reserves, selling pressure will accumulate when they begin to liquidate. However, the revenue is rising which flashes bullish signals for the crypto.
Collectively, Bitcoin price in the long term appears to be bullish despite the current trend continues to remain choppy. Therefore, a decent rally may be expected during the second half of 2022 that may diminish the bearish impact on the BTC price as well as the entire crypto space.