Bitcoin’s off-chain data shows that BTC prices have more upward momentum

After months of relentless turmoil, the crypto industry has been falling in the past few weeks, and the total market value of the field recently Break the 2 trillion dollar mark For the first time since May.

In fact, in the past 21 days alone, as much as US$700 billion has entered the field of digital assets, which makes many people believe that there may be more in the short term.

Two recent events seem to have created this bullish sentiment: Ethereum’s successful London hard fork, which made the network look more scalable, and the recent infrastructure bill introduced by the US Senate, which taxed U.S. crypto businesses. Influence.

Kadan Stadelmann, CTO of Komodo, a blockchain solution provider, told Cointelegraph:

“Regardless of the legislative outcome, this discussion puts cryptocurrency at the forefront of U.S. policy and raises public awareness of blockchain technology. Another result is that if policy clarification is officially passed, traditional financial institutions may increase The accumulation of cryptocurrency.”

Take a closer look at some off-chain data

Stadelmann said that Bitcoin (Bitcoin) Currently, accumulation is taking place between whales and miners, and foreign exchange outflows are causing supply shocks, which indicates that prices may continue to rise in the short term. Having said that, he believes that although BTC can soar to around US$50,000, or possibly higher, it is difficult for this major cryptocurrency to recover its historically highest value of US$65,000.

Obviously, the core factor driving Ether is (Ethereum) The most recent bullish development is its recent London upgrade.In fact, according to the data Released According to the crypto analysis company Glassnode, there have been several peaks in the exchange outflow indicator of altcoins. For Marie Tatibouet, the chief marketing officer of the cryptocurrency exchange, this shows that more and more people continue to accumulate outside the exchange. ETH.

She further emphasized that the total value locked in decentralized finance or DeFi contracts also exceeded US$80 billion for the first time since the first quarter of 2021. In addition, the amount of ETH pledged in the beacon chain has exceeded US$6.5 million. “In general, these are very positive signals, telling us that the market has confidence in Ethereum,” Tatibouet said.

HODL is strong

As previously reported by Cointelegraph, the accumulation of Bitcoin has been going on behind the scenes, and the total supply of Bitcoin is determined by Long-term holders reach a record high Recently it was 82.68%. On the contrary, the supply pool of short-term holders continued to decline, dropping to around 20%. This seems to indicate that more and more BTC owners want to keep their cryptocurrency.

Glassnode’s analysis team emphasized that whenever the short-term holder supply ratio reaches 20% or less, it is followed by severe supply deflation-that is, supply shortages, which usually help drive the value of the underlying asset higher.

Not only that, earlier this week, the dominance of Bitcoin transactions with more than $1 million more than tripled-from 30% to 70% of the total transfer value-for the first time since September 2020 .In this regard, since most retail investors usually do not promote large-scale transactions, the people at Glassnode Believe Institutional investors may be behind the soaring trading group of 1 million to 10 million US dollars.

The whale continues to hold

According to crypto analysis company mood, Global Bitcoin millionaires-that is, anywhere between 100-10,000 BTC held by wallet addresses-have not yet sold their coins to make quick profits. The total number of BTC held by these addresses is now 9.23 million, which is the same as the all-time high set on July 28.

In addition, the recent net flow of Bitcoin on digital asset trading platforms to addresses that may be designated for storage is impressive.According to the updates of analysis platforms such as Whale Alert, tens of thousands of BTC are moved Every day, show healthy trading activities in the crypto ecosystem.

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Yuriy Mazur, head of data analysis at CEX.IO Broker, a platform for cryptocurrency trading through CFDs, told Cointelegraph that the data shows that most holders are optimistic about the recent market growth and do not intend to give up regardless of the recent negative news that has shaken the market. How, they all increased their positions. He added:

“It is expected that by the end of this year, the price of Bitcoin will soar from the current $45,000 to over $70,000. Many investors are already looking forward to being part of this historic price increase.”

Institutional interest remains strong

According to data from the on-chain analysis service CryptoQuant, the Bitcoin reserves of global derivatives exchanges continue to grow reduce It reached a level that appeared only before May, when the most recent price adjustment had not yet occurred. In response, the company confirmed that as of August 10, the total derivatives reserve was 1.256 million BTC, which was the lowest level since May 11.

In other words, the funds seem to be Influx into the Grayscale Bitcoin TrustAs new data shows, in the past few months, more and more traditional players have continued to increase their crypto vaults. Not only that, but there is enough information to show that even in the most intense phase of the BTC bull market this year, the derivatives balance has risen in the opposite way-the characteristic of the decrease in the balance is that it reached $64,500 only at the beginning of the operation.

It seems that most institutional entities have not been hit by the negative news surrounding the crypto market, such as China’s miners’ routes or On the continuing saga of the U.S. Infrastructure ActEarlier this week, the total transaction balance of Bitcoin was approximately 2.44 million BTC, which was a three-month low, as evidenced by this fact.

No big panic selling

As we all know, the market crash in 2018 was largely due to the initial token issuance boom. Hundreds of startups accumulated billions of dollars in funds, but quickly fled shortly thereafter. When the bubble really broke out, the total market value of the entire industry fell from US$700 billion to US$102 billion in less than 11 months, a loss of more than 85%.

On the other hand, due to the monetary policies implemented by global central banks, the price increase in 2021 seems to be driven by sound macroeconomic factors, which is largely due to investors seeking currency safe havens. In the long run, in the past year and a half, Global debt figures It continues to grow and currently exceeds US$281 trillion (approximately 355% of global GDP).

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Finally, according to the Institute of International Finance, such borrowing will only Compound Take it a step further in the short term—at least another $10 trillion by the end of 2021—especially as COVID-19 variants continue to gain ground around the world.

With all this data, it seems that the continued positive momentum surrounding the crypto market is mainly driven by strong fundamentals and solid innovation.