Bitcoin accumulation trend can create a 2013-style BTC price “double increase”


Bitcoin (BitcoinData from Glassnode shows that the price from about $65,000 to as low as $30,000 did not force long-term holders to sell.

The on-chain analysis platform showed that at the time of the collapse of BTC/USD buying, the unused Bitcoin reserves held in low-output wallets surged.

At the same time, the data also shows the Bitcoin boom among miners (entities that produce and supply newly minted cryptocurrencies for the retail market). As a result, the active supply of BTC has begun to decline in recent trading days.

Miners and long-term holders squeeze the new supply of Bitcoin. Source: Glassnode

During the period when the BTC/USD exchange rate fell, short-term Bitcoin holders (entities that had accumulated flagship cryptocurrencies for less than a week) were the largest sellers. Glassnode data suggested Those newer market entrants are Downturn in may, BTC dropped 38% from the highest price in history in one month.

Bitcoin price fluctuationsAt the same time, continue to use short-term traders to fluctuate up and down by double-digit percentages. The 24-hour Bitcoin Volatility Index on TradingView, after reaching a trough of 1.90 on April 2 and closing at around 19.70 on May 20-during this period marked a 936% rise, with BTC/USD rising to around $65,000 The record high was revised down to $30,000.

Bitcoin historical volatility index. Source: TradingView

Increased price volatility indicates that investors are still afraid or uncertain about Bitcoin’s next market bias. The intraday candles in the chart above show continued volatility-the closing price of the candles on Sunday was 34% lower than the previous trading day. But in general, this trend seems to be developing in an unfavorable direction.

Except, there is a gain

Glassnode hopes that long-term holders will realize their profit and loss at a certain point in time (PnL).Analysis portal Cited A proprietary indicator used to check the exhaustion level of long-term holders, that is, their ability to hold BTC is broken, and prompt them to achieve profit and loss in the market.

The long-term holders of Bitcoin have not realized net profit and loss after physical adjustment. Source: Glassnode

Glassnode analysts wrote: “The current net unrealized profit and loss level held by LTH tests the 0.75 level, which is the level of success or failure between past bull and bear market cycles.”

“Only in the 2013 “dual pump” program, this indicator recovered. If LTH continues to see its paper revenue decline, this may also generate new sources of indirect costs. On the other hand, higher prices and purchases The supply contraction brought about by bargain hunting will begin to resemble the “double pump” scenario in 2013.”

Bitcoin is bullish from a macro perspective

The only factor that separates the current situation of Bitcoin holdings from the previous situation is the trillion-dollar deficit in the United States. Since World War II, the world’s largest economy has recovered its highest debt-to-GDP ratio. On Friday, President Biden (Joe Biden) Announce Another $6 trillion spending plan for 2022.

Overall, the plan will increase government spending to US$8.2 trillion per year by 2031. This means that the annual fiscal deficit in 2022 will exceed US$1.3 trillion and US$1.8 trillion respectively.

One of the biggest concerns in the market is that the increase in government spending will cause the inflation rate to rise sharply.

Institutional investors have surged in demand for Bitcoin due to their anti-inflation claims.Supporters pointed out that currently only 21 million BTC tokens can be supplied, making it relatively Unlimited printing of dollars.

Companies such as Tesla, Square, MicroStrategy, and Ruffer Investments have added Bitcoin to their balance sheets to replace cash. Billionaire investors, including Stan Druckenmiller, Paul Tudor Jones and Mike Novogratz Also assigned A significant portion of their investment portfolio invested in Bitcoin.

Fundamentals continue to provide bullish support for Bitcoin.

Dan Held, Kraken’s Director of Growth Marketing, pointed out: “Bitcoin was made at this moment.” “We are in the largest money printing business in human history, and Bitcoin is the only way out.”