The crypto market received a breath of fresh air on Wednesday morning as the prices of the leading crypto assets recovered from Tuesday’s lows.
Bitcoin went up to $34,000 after diving to $29,000 on Tuesday, its lowest level this year. Ethereum also went above $2,000 after the sell-side pressure had pushed it close to $1,700 on Tuesday.
Most of the other leading tokens followed the same pattern recording double-digit gains from their Tuesday afternoon lows.
The recovery comes after a week in which all crypto assets recorded strong declines that were amplified by the Chinese authorities’ decision to ramp up their crackdown on crypto mining and trading operations in the country.
Between 15 June and 22 June, Bitcoin lost almost 30% as its price fell from $41,000 to $29,000. In the same period, Ethereum lost approximately a third of its value and Binance Coin (BNB) the token used by the Binance blockchain went down almost 40%.
Low market liquidity
The recent crypto market evolution has also led to lower activity on most blockchains, which reflects reduced trading levels.
“On-chain activity across the board is remarkably low across Bitcoin and Ethereum, with demand for block-space falling to levels last seen in 2020,” reads a note by blockchain data and intelligence provider Glassnode Insights.
However, while low demand for transactions is a generally bearish insight, it also reflects an unwillingness of strong hands to spend at these prices, according to the same source.
Bitcoin active addresses have fallen by 24% from the peak of 1.16m seen from March to early May. The current activity of 884k addresses was last seen this time last year.
For Ethereum, the fall in active addresses has been even larger, or approximately 30% from the brief peak of around 676k addresses.
Both Bitcoin and Ethereum are settling 63% and 68% less USD value respectively, compared to the recent highs set in May, according to Glassnode data. The fall in trading values is partly due to the price declines but also due to lower trading volumes.