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The price of Bitcoin (BTC) remained relatively stable over the weekend, approaching $ 34,000 on July 11. Nonetheless, BTC / USD fell almost 50% from its all-time high, nearly $ 65,000 in mid-April. But the massive downward movement has not deterred investors from betting on the long-term bullish outlook for the digital asset.
According to one of the Glassnode metrics, dubbed Liveliness, the Bitcoin market has noticed a change in the “macro hodling behavior” of long-term investors. Hodling represents crypto investors’ ritualized response to declining market trends, a memes-driven investment strategy from a drunken forum post in 2013 and a typo.
Meanwhile, liveliness is the ratio of the cumulative coin days destroyed to the cumulative sum of all coin days ever accumulated by the network. It varies between zero and 1, with zero representing the highest proportion of dormant Bitcoin supply, i.e. HODLing behavior. This shows that the global accumulation of parts days has overtaken the days of parts destroyed in on-line activity.
However, a higher degree of distribution does not necessarily predict bearish cycles. For example, between November 2020 and April 2021, the liveliness ratio increased alongside Bitcoin prices, suggesting that despite weaker HODLing behavior, the Bitcoin market has not entered a bearish phase.
This could be due to massive spikes in trading volumes at the start of this year. In the first quarter, Bitcoin’s trading activity as a whole reached more than $ 6 trillion, up from $ 1.14 trillion in the fourth quarter of 2020, according to data obtained from Bitcoinity.
Therefore, while long-term holders started spending their Bitcoin between November 2020 and April 2021, higher transaction volumes on all crypto exchanges show that retail demand has absorbed the selling pressure. But in April, as analyst Willy Woo noted, the sell exceeded normal bull market buying pressure.
Speculative participants have started selling their new coins to long-term holders, Woo wrote in a July 2 newsletter, referring to a so-called “Rick Astley” chart that studies Bitcoin flows through hands. strong and weak. Excerpts:
“It is very clear to see that long-term holders are moping up speculative coins at a sustained rate. It is now a waiting game until this is reflected in price action, the data indicates with confidence build-up background training. “
Bitcoin holds $ 30,000
A spike in Bitcoin’s sense of accumulation appears as the cryptocurrency continues to maintain its bullish bias above a heavily held $ 30,000 support level.
The BTC / USD exchange first fell to $ 30,000 on May 19, during the global cryptocurrency market crash. Since then, the pair has tested the bottom price at least four times, only to see a strong bullish rebound later. This has turned $ 30,000 into a level of psychological support which, if reduced downward, risks causing Bitcoin prices to drop to $ 20,000.
Joel Kruger, a forex strategist at London-based investment management group LMAX, noted earlier this week that Bitcoin could revisit $ 20,000 as it remains under pressure from global market sentiment. The analyst was referring to the latest stock market collapse, over concerns over the spread of the Delta variant of Covid-19.
“It would be foolish to rule out the possibility of a drop below the June low, and we believe there would be a risk in this scenario where the price of #Bitcoin could revisit the old high of around 20 $ 000, “he added.
“But at this point we see the market very well supported.”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research before making a decision.
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