Weak on-chain metrics and the prevalence of fears in the derivatives market are hindering the recovery of bitcoin after a wave of price declines since the end of March. These are the conclusions made by Glassnode analysts.
— glassnode (@glassnode) May 23, 2022
The collapse of LUNA and the general weakening of the market affected the expectations of participants in the crypto derivatives market. In bitcoin, the ratio of open puts and calls has increased from 50% to 70%, which indicates an increased desire of investors to secure positions from continued negative dynamics.
In calls with expiration at the end of July this year, the largest open interest (OI) is concentrated around the $40,000 mark.
Participants give the greatest preference to puts that will bring profit in case of a price decrease to $25,000, $20,000 and $15,000. In other words, until the middle of the year, the market is oriented towards risk hedging and/or speculation on further price reduction.
At a longer distance optimists prevail. Year-end contracts have the most open positions in the $70,000 to $100,000 range. In puts, the largest OR is concentrated between $25,000 and $30,000, which is close to current levels.
On-chain indicators for Bitcoin and Ethereum point to a weakening demand for space in the block to lows in several years.
In the network of the first cryptocurrency, the total daily transaction fees returned to the range of minimum values observed since July 2021 of 10-12 BTC.
In Ethereum, the median gas price dropped to 26.2 Gwei after short-term spikes caused by the distribution of the Otherside metaverse NFT and the collapse of Terra. The last time such levels were observed in May-July 2021 and after March 2020.
The rate of burning ETH through EIP-1559 fell to a record low. Last week, 2370 ETH was withdrawn from circulation, which is 50% less compared to the beginning of May. The share of coins not subjected to this procedure reached a record 81.6%, which also put pressure on the price.
Analysts pointed to a decrease in the number of active addresses and the amount of transferred value when interacting with popular DeFi protocols like Aave, Compound and Uniswap.
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