Bitcoin on-chain data suggests no bull market top at $60K, selling activity declining
For the first time in the bitcoin (BTC) bull market, not only long-term investors but also short-term speculators, who normally increase daily selling pressure towards the end of the market cycle, are getting more confident about rising prices while holding onto their bitcoins.
There’s no reason not to. There’s no money, no money at all, no money at all.
Продажная активность биткойнов снова снижается
Каждый рынок быков Bitcoin обычно совпадал с растущим числом краткосрочных спекулянтов, приходящих на рынок в надежде получить быструю прибыль, For this reason, we are hoping that the European Parliament will be able to support the work of the committees, and that it will be able to do so.
внутрицепочечных индикаторов, который видитот тренд, разворачивающийся в каждом цикле, называется HODL волнами. образом, на, которой каждый адрес BTC держит Bitcoin перед продажей на рынке, сгрупирована в термин ведра, которые затем вуализуются в различных цветовых.
Bitcoin: HODL waves. Source: Glassnode
Someone who has held their bitcoin for five months, for example, falls into the 3m-6m category, a bright orange ribbon. When this person decides to sell, he falls out of this bucket and appears in the 24-hour bucket, a dark red ribbon.
This means that the redder the colors on the HODL wave chart on the corresponding date, the greater the bitcoin conversion in the short term. This activity is lowest during a falling market and highest during a rising market, while short-term activity tends to peak around the top of the rising market.
Realised value reflected in HODL waves is essential
Since the price of bitcoin fluctuates wildly during market cycles and HODL waves only take into account the absolute number of bitcoins moved, this chart does not take into account the total value realized by the bitcoin seller that day.
Since the higher the price, the more profitable it becomes for Hodler, HODL waves can be weighted by the realized price, i.e. the price at which each bitcoin was bought/sold on average.
This setting allows you to view value additions on a daily basis with color-coded ranges of value add terms.
Bitcoin cycle tops usually form around a short-term spike in activity.
Once the HODL waves are weighted by the realized price, realized price HODL waves are generated, a concept first introduced by the Typerbole chain analyst. This fit shows that the tops of the 1w-1m buckets coincide with all the tops of the bull market so far.
Not only does this indicator show that the current selling activity has not yet reached the typical peak of a bull market, but it even shows that for the first time in the history of the bitcoin bull market, this trend is declining while the price continues to rise.
This is a very unusual trend in a bull market. Assuming that the price peak has not yet been reached, this suggests that profit seekers, both short and long term, are starting to hold back their bitcoins again to wait for higher prices, increasing pressure on the supply of bitcoins on the exchanges.
Bitcoin sales activity quite low compared to period of ownership
Rafael Schulze-Kraft, CTO of Glassnode, has a similar take, looking at long-term collectors using Days of Coin Destroyed, a metric that shows the total number of days owned and destroyed by owners selling bitcoins.
Based on the three-month moving average of this indicator, the breakout was last seen in the summer of 2019, when the price peak had already been reached.
Okay, that’s good.
Experimenting with ruined mint days: Despite a $BTC price above $50k, the 3 month CDD is low and recently declined.
The elders are ironclad here, the hodlers show conviction and do what they do best.
This doesn’t look like a top to me. #Bitcoin pic.twitter.com/z8OL8Gt73E
– Rafael Schulze-Kraft (@n3ocortex) 9. April 2021
If the price were close to the top of the bull market, one would expect a much higher indicator value, as long-term holders would benefit to a significant extent, which is not the case at present.
Bitcoin spending behavior at low market capitalization
If we further develop this concept of destroyed currency days in terms of destroyed average value from the perspective of market capitalization, we end up with what is called a no-action flow. This is a concept invented by analyst and trader David Puell.
Bitcoin: Dormant power stuck by essence. Source: Glassnode
The snooze flow describes the average annual sliding behavior of bitcoin donors. It is based on the retained value, which is broken down into the total value created in the market.
This indicator suggests that the 365-day average of bitcoin issuance measured in US dollars is very healthy and well below the level of issuance in previous bull markets.
It’s Bitcoin rocket fuel.
Bitcoin’s selling activity, both by speculators and long-term holders, has declined, while annual spending is surprisingly low relative to market capitalization. All these data points in the chain indicate that the market is moving towards even greater supply compression. This is one of the best rocket fuels to drive up the price of bitcoin.
However, this is not a guarantee because in this climate constant demand is needed to set prices. It is therefore important to keep a close eye on demand from high net worth individuals and institutions, which has been the main driver of acquisitions in recent times.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph. Nothing here should be construed as investment or business advice. Every investment and every stage of trading involves risk. The author has bitcoins. You should do your own research and/or consult a financial advisor to make your decision.
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