Long-term Bitcoin (BTC) HODL holders are refraining from selling their holdings, blockchain data from Glassnode shows.
According to Glassnode’s BTC Percent Supply Last Active 2+ Years indicator, bitcoin, whose last significant support was over two years ago, has hit a quarterly low of 45.364%.
BTC Interest Supply. Last active for over 2 years. Source: Glassnode
This trend suggests that bitcoin HODLers who bought near the peak of the last bull run in 2018 and before are showing deeper conviction as BTC consolidates above $55,000. Interestingly, the December 2020 peak suggests that many were sold at an equilibrium price of around $20,000, which is in line with the previous high of late 2017.
Why is bitcoin consolidating with low rising volatility?
Typically, bitcoin peaks or undergoes a sharp correction when long-term holders begin to sell quickly.
In previous bullish cycles, the liquidation of HODLers who took profits on their positions resulted in a rapid decline of 50%, causing the entire crypto-currency market to fall sharply for short periods of time.
This trend coincides with the fact that HODLers are not selling a significant amount of BTC, suggesting that the peak may be some time away.
Bitcoin stabilizing around $55,000 is very optimistic for two main reasons. First, BTC has maintained a strong market structure despite some obstacles. Second: From a technical perspective, BTC’s consolidation below the absolute high is a positive sign.
Over the past two weeks, bitcoin has faced serious threats that could be the catalyst for a serious short-term decline.
In particular, the interest rate on US government bonds rose. This often leads to a decline in technology stocks, which has a negative impact on all vulnerable markets.
As Ki Yang Zhu, CEO of CryptoQuant, explains, miners hold many bitcoins that they have not sold in recent months. In fact, the number of BTC towed by miners this year was significantly lower than in previous rollbacks. This may indicate that mine operators expect higher prices in the future.
A total of BTC was moved from the portfolios of all miners. Source: CryptoQuant
The 17th. March Key also highlighted three other factors based on blockchain trends that could contribute to a stagnant uptrend in bitcoin. He wrote at the time:
I think $BTC will need some time to get back a leg up in demand/bid. 1/ Too many $BTC holdings in USD compared to what is happening on the cash exchanges. 2/ The capitalization of the BTC market is too large to gain a foothold with the capitalization of the stablecoin market alone. There were no significant inflows from USD spot funds – premium to neutral currencies, negative premium to GBTC, premium to QBTC.
Despite the risks mentioned above, bitcoin has done relatively well and managed to not fall below $50,000.
The bottom of the BTC?
Prominent pseudo-traders, including Rekt Capital, have said there could be enough confirmation that a bitcoin bottom could form in the coming days.
It’s hard to predict when an exact bottom will form, but if BTC stays above $55,000 for a few days and prints a low high, a new rally could come, the trader said. He wrote:
You will never really know when the actual retracement of #BTC will bottom. But you can look for ways to confirm a possible bottom. If $BTC makes a high low in the coming days, that should be enough confirmation that the bottom is in the retracement.
So while the price of bitcoin remains above $55,000 in the near term, a higher formation low won’t change the fact that the market is entering April, a historically bullish month that hasn’t closed in the red since 2015.
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