Bitcoin still grows fundamentally despite unpleasant price action on market
The number of addresses in the cryptocurrency market that now have more or exactly 1 BTC is increasing exponentially as Bitcoin consolidation is still going on in the market. As the data suggests, the number of addresses containing Bitcoin reaches 880,000.
Despite the massive reversal on the cryptocurrency market, retail traders and investors have not stopped the accumulation of the asset for a second as the growth of the number of wallets that hold BTC began in May 2021.
The main reason for such dynamics could be the fact that small investors tend to choose HODLing as their primary strategy rather than actively trading digital gold and having to face the risk of losing their funds.
Additionally, the rising adoption rate of Bitcoin and other cryptocurrencies directly affects the number of wallets that hold 1 or more coins on their balance as the “orange coin” still acts as one of the main ways of “entering” on the cryptocurrency market.
Some larger funds and investors tend to redistribute their Bitcoin holdings among many wallets to secure their users’ funds and improve the fund management process.
Bitcoin’s network growth does not seem to help
Unfortunately, Bitcoin’s fundamental growth is not big enough to keep the first cryptocurrency afloat as it keeps on losing its value almost every week. The 2021 Bitcoin rally was fueled by institutional investors that have mostly left the cryptocurrency market.
Unlike in 2017, retail demand is no longer sufficient to push the price of the first cryptocurrency high enough to trigger another rally. Fortunately, we are already seeing many signs of capitulation that could attract institutions willing to buy Bitcoin at a cheaper price.
