As a seasoned crypto investor with years of market ups and downs under my belt, I find myself intrigued by the latest insights from Glassnode’s “Week Onchain” newsletter. The resurgence of accumulation among long-term holders (LTHs) and large investors, after a challenging period marked by extensive distribution, presents an interesting dynamic in the Bitcoin market.
As a crypto investor, I’ve noticed an intriguing development in the Bitcoin market as per the latest insights from Glassnode’s “Week Onchain” newsletter. It seems that long-term holders (LTHs) and large investors are resuming their pattern of accumulation. This trend is a stark contrast to the widespread distribution we observed earlier this year, suggesting a potentially bullish outlook for Bitcoin, even amidst the broader market’s volatile conditions.
The Bullish Arguments For Bitcoin
Over the past few months, the Bitcoin market has been a tough nut to crack, featuring substantial dispersion, particularly after reaching its peak in March 2024. This phase of dispersion, during which wallets of all shapes and sizes were actively involved, is starting to show indications of a change. Specifically, it’s the actions of large wallets, typically linked to institutional investors and exchange-traded funds (ETFs), that are now hinting at an accumulation trend.
The Accumulation Trend Score (ATS), a metric that evaluates weighted balance changes across the market, has reached its maximum value of 1.0, signaling significant accumulation over the last month. This uptick in accumulation is also reflected in the activity of Long-Term Holders (LTHs), who, after a period of heavy divestment, have added approximately 374,000 BTC to their holdings over the past three months.
Large-scale Bitcoin holders, significant contributors to the Bitcoin ecosystem, are showing a renewed desire to keep their coins. The supply of these long-term holders has moved back into a growth phase over the past week, suggesting less inclination towards selling and a heightened interest in stockpiling. Although there was substantial distribution from April to July, Bitcoin’s current market price remains above the Active Investor Break-Even Point, an essential indicator that separates bullish and bearish investor attitudes.
According to the report, the market’s tendency to stabilize around this point indicates a solid foundation. This suggests that investors are expecting a continuation of bullish trends over the immediate and near future.
The Bearish Arguments
In simpler terms, the market is facing ongoing difficulties as the Cumulative Volume Delta (CVD) metric suggests that there’s more selling pressure than buying pressure in spot markets. Over the past two years, the average net difference between buying and selling has ranged from -$22 million to -$50 million, indicating a consistent trend toward selling.
As someone who has been closely following the cryptocurrency market for several years now, I find it intriguing that the revised version of the CVD metric, which takes into account this specific bias, appears to align with the recent inability to surpass the $70,000 resistance level. This observation suggests that the current weakness in spot demand might be playing a significant role in creating this technical resistance. However, if the revised CVD were to return to positive values, it could signal a potential recovery in demand for Bitcoin, which would certainly catch my attention as an investor.
Despite the volatile price fluctuations, long-term holders (LTHs) continue to amass Bitcoin, suggesting a steadfast and patient investor group. The proportion of Bitcoin wealth controlled by these long-term holders is still high compared to past all-time high (ATH) spikes, implying that they are reluctant to sell at current prices and might be anticipating higher values before offloading more.
In simpler terms, the LTH Sell-Side Risk Ratio, which compares actual gains and losses against the market’s total value, is currently lower than in past periods. This indicates that large traders (LTHs) aren’t aggressively selling off their assets as much, suggesting they haven’t yet decided to get rid of their positions.
Bitcoin holders, especially Long-Term Holders (LTHs), returning their investments could be a positive sign for the market. The persistence in holding Bitcoin, the increased wealth within the network attributed to long-term investors, and their continued focus on accumulation despite market turbulence suggest a strong belief among investors. Such trends might lead to a substantial increase in Bitcoin’s value, setting the scene for a potential price rise.
At press time, BTC traded at $59,138.
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2024-08-14 02:42