Important facts:
76% of Bitcoin money is considered an illiquid supply, says Glassnode.
BTC held by long-term holders has increased 22% since March 2021.
Glassnode’s first weekly report on the Bitcoin market claims that 2022 begins with expectations of price consolidation, although there is a combination of bullish and bearish signs in that market today.
The report claims that the price of BTC has remained in the range it has held since late November, fluctuating between $ 51,654 and $ 46,197 in the week between December 27, 2021 and January 3, 2022.
Through various on-chain metrics Despite moderate upward trends in supply dynamics, little activity can be seen on the Internetsays the study. “Currencies continue to migrate to dormant portfolios that are becoming increasingly illiquid, while investor profitability is associated with declining prospects,” the study points out.
The graph below shows the price of BTC from October 2021 through the last Monday, January 3rd, and the seven-day period that Glassnode reflects in its report is highlighted in pink.
Bitcoin price between October and January 3, 2022. Source: Glassnode.
The price volatility this week is similar to Bitcoin since late November. The authors emphasize that they expect these lateral movements to continue in the context of “lateral consolidation”.
Moderate growth in Bitcoin addresses
The number of Bitcoin addresses with a balance greater than zero rose from 32.13 million to 39.6 million in one year, an increase of 23.2%. As can be seen in the following graph, the growth rate is more pronounced from the beginning of January 2021 from January to April 2021 and then the growth continues, but with a smaller slope.
advertising
Bitcoin addresses with a balance greater than zero. Source: Glassnode.
As shown in the graph, the increase in addresses since the historic maximum was set last October is 3.7% on top of last year’s growth of 23.2%. That corresponds to 1.415 million additional addresses in two and a half months.
Daily activity of the Bitcoin network is increasing
In terms of Bitcoin’s daily activity, the number of on-chain units has managed to exceed 275,000 per day. In the clearly bullish periods of 2016-2017 and 2020-2021, as can be seen in the following graph, the mark of 350,000 daily active units was exceeded.
The graph highlights a “bear market channel” that increases from 150,000 daily active units to 250,000 active units. This means that during periods of low prices and relatively low interest rates, sustained growth in network users will be sustained, according to the report.
Activity growth in the chain it was quite noticeable relative to the above channel during the previous bull markets. In contrast, the moderate economic boom in 2019 is referred to as “mini-bullish” in the report. This was followed by nine months of downtrend lateralization and surrender. Could the even more modest surge in late 2021 indicate a continuation of the 2019 market pattern? The report leaves that question to readers using the acronym TBC and the question mark (to be continued?).
The dynamics of the Bitcoin supply are constructive
The report said that given the “anemic demand” of the Bitcoin market, retail investors, and the occasional “tourist”, there is one major upside: the inactivity of the BTCs held, suggesting patient accumulation.
December 2020 marked the beginning of the significant appreciation of Bitcoin in the first quarter of 2021. In the final month of 2020, the previous all-time high of USD 20,000 was exceeded and this momentum allowed us to reach USD 64,000 in April 2021, the study highlights.
If we look at the last active metric for coins that are older than a year, we can see that a large part of the coins accumulated at the end of 2020 remain unused to this day. Since October 2021, more than 682,000 BTC have migrated to the age group of more than a year, representing 3.3% of the supply of coins in circulation.
Glass knot.
More than 57% of the coin supply is now over a year old, comparable to the 51.5% at the time of the upward momentum in April 2019.
Percentage of Bitcoin supply of coins of 1 year or more. Source: Glassnode.
Another factor that could be favorable for a bullish development of the Bitcoin price is the behavior of the long-term holders (LTH). As published by CriptoNoticias on December 31st, this holder segment now controls 13.35 million BTC and has maintained that level since the end of November despite the correction that occurred after the price’s historic high on November 10th.
As of March 2021, LTHs have acquired 2.42 million BTC, an additional 22.1% of the supply they controlled at the time. The historical maximum of the supply in the hands of LTH is 13.5 million BTC and was reached at the end of October.
In his latest bulletin on the Bitcoin market, the renowned analyst Willy Woo points to a bullish structure of this market, precisely because of the behavior of the LTH, which are in a zone of maximum accumulation. Another bullish sign Woo mentions is the change in attitudes of speculative traders who stopped selling and bought BTC again.
Comments are closed.