According to a report from Glassnode, the encryption market is currently experiencing a severe liquidity crunch, with both on-chain and off-chain transaction volumes falling to historical lows.
Glassnode analysts said that while Bitcoin and Ethereum saw net inflows at the beginning of the year, they have returned to neutral or negative inflows since the end of August, indicating stagnation and uncertainty.
Glassnode on-chain metrics show that total U.S. dollar volume traded on Bitcoin has dropped to a daily average of $2.44 billion, the same level as in October 2020.
In the off-chain derivatives market, Bitcoin’s daily trading volume also reached historically low levels, falling to $12 billion for the first time since the 2022 lows.
Glassnode said that despite the market downturn, the currency holding trend remains strong. Glassnode defines long-term holders as on-chain entities that hold tokens for more than 155 days, and their holdings reached an all-time high of 14.7 million Bitcoins. Meanwhile, short-term holders have fallen to their lowest levels since 2011.