Bitcoin is 40%+ down from its ATH, but on-chain analysts say it's ‘starting to bottom out’

cointelegraph.com:

The cryptocurrency market has experienced another rollercoaster week that saw Ether price drop below $3,000 and Bitcoin price hit a new multi-month low at $37,700. Equities markets also endured a sharp sell-off primarily due to investor fear over potential changes to the size of the Federal Reserve's next rate hike.

To date, Bitcoin price 41.72% down from its $69,000 all-time high and while price might be in what some describe to be a bear market, a deeper dive into various on-chain and derivatives data shows that a drop in inflows and pivot from institutional investors are the main factors impacting BTC price action.

A lot has changed in the crypto market since 2017 when the Bitcoin market was dominated by spot trading and derivatives markets made up just a small fraction of trading volume.

According to a recent report from on-chain market intelligence firm Glassnode, Bitcoin derivatives “now represent the dominant venue for price discovery” with “future trade volume now representing multiples of spot market volume.”

This has important implications for the current price action for BTC because futures trade volume has been declining since January 2021. The metric is down more than 59% from a high of $80 billion per day during the first half of 2021 to its current volume of $30.7 billion per day.

During that same time period, perpetual futures have overtaken traditional calendar futures as the preferred instrument for trading because they more closely match the spot index price and the costs associated with taking delivery of BTC is considerably lower than traditional commodities.

According to Glassnode, “the current open interest in perpetual swaps is equivalent to 1.3% of the Bitcoin market cap, which is approaching