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Bitcoin Price, Liquidity and Sentiment Dropping Post-Halving, Reports Crypto Analytics Firm

May 28, 2020

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The fundamentals of Bitcoin (BTC) are on the decline as the leading cryptocurrency struggles to remain above the $9,000 level.

The crypto analytics firm Glassnode says its GNI index, which assesses the state of Bitcoin’s on-chain strength based on network health, sentiment and liquidity, is dropping.

In its latest market update, Glassnode says Bitcoin’s weekly GNI is down to 60 points, dropping by 13 points week-on-week.

“This drop – mainly driven by decreases in Sentiment and Liquidity – solidifies the trajectory change seen in Week 20; for the time being, on-chain fundamentals are in decline, alongside Bitcoin’s price.”

Liquidity dropped by 14 points week-on-week, down to 43 points, its lowest point since January. Glassnode says the sudden drop is partly due to decreases in exchange inflows and on-chain transaction volume.

Sentiment has dropped by 20 points amid declining economic activities and dropping prices.

Glassnode says the slump is also attributed to waning accumulation among crypto investors after heightened enthusiasm leading up to the network’s third halving.

“While hodlers are still accumulating, the rate at which they are doing so is declining.”

So far, Bitcoin’s current price action is in line with its historical record. Bitcoin’s price also dropped in the days and weeks following its first two halvings, before slowly beginning to turn around.

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

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Featured Image: Shutterstock/Larina Marina