Tens of millions of bitcoin addresses plunge into the red

The bitcoin price has fallen below $20,000, and more fear, and panic has crept into the market, with a score of ’28’ on the Crypto Fear & Greed Index. The rumor that the 140,000 Mt.Gox coins would be in circulation turned out to be false. In addition to the uncertain macro conditions, rumors like these are fueling fears, and bitcoin owners are more likely to exchange their BTC for dollars or euros.

Apparently the 140,000 Mt. Gox $BTC coins are NOT being released tomorrow. These are rumors being repeated by large accounts for engagement with no actual factual basis. I looked for a source to verify these claims and there isn’t one.

— CrediBULL Crypto (@CredibleCrypto) August 27, 2022

1. ‘Weak dollar makes bitcoin rise’

But the dollar and the euro are also weak. Inflation and purchasing power are popular search terms at the moment. You buy much less for the same euro, and prices are also skyrocketing in America.

Bitcoin analysts such as Nicholas Merten (DataDash) also see that current inflation levels continue to eat away at the purchasing power of people and businesses. There will come a time when there is much less confidence in the dollar and the euro, making bitcoin more attractive as a hoarding tool, Merten believes in this video. He draws a comparison with the function of gold in the 1970s.

‘If the Federal Reserve doesn’t take the lead in cooling inflation. If the Fed can’t do it, we lose confidence in the dollar as a world currency but in other fiat currencies like the euro and the pound as well. If there is no stable dollar, a lot of liquidity that wants to go somewhere is released, and that is exactly what happened to gold in the 1970s.’ The price of gold has risen considerably since the 1970s.

2. Tens of millions of addresses in the red

The price is falling, and that, also has a logical effect on the number of UTXOs in the red. UTXO, literally stands for Unspent Transaction Output and is a bit of bitcoin which has not been spent on a bitcoin address. The total of UTXOs is the balance you read off in a wallet.

Figures from Glassnode show that the number of UTXOs on-chain at a loss has now shot through the 35 million mark, the highest level in the past month (based on a seven-day average).

https://twitter.com/glassnodealerts/status/1563666574766120969

3. Number of relatively small addresses continues to increase

On the other hand, the number of addresses with 0.1 bitcoin or more continues to increase. This trend is persistent and is not abating due to the recent dip below $20,000 (again). This could have a number of explanations: more new bitcoin owners opening addresses.
But it could also be motivated by the desire to be more private with your coins. Opening a new address with each transaction increases your privacy. Therefore, a consequence of more address management is possible.