Weekly Onchain Insights: Bitcoin Post Halving, Where are we now?
The IntoTheBlock newsletter highlights weekly interesting data points about the crypto markets.
Every week the IntoTheBlock team publishes a newsletter that summarizes key data insights about the crypto market. Below is a quick summary.
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Hey onchainers,
Welcome back to IntoTheBlock’s newsletter. We have created a different type of newsletter for crypto fans that is not about news, but about data and analytics. Every week, we deliver valuable data insights about the crypto market.
ITB Special Edtion: Bitcoin Post Halving, Where are we now?
Bitcoin’s most recent halving occurred on May 11, 2020, shortly after 3PM EST. On that day, the number of bitcoin (BTC) entering circulation every 10 minutes dropped by half, from 12.5 to 6.25. This only happens once every 4 years.
Leveraging blockchain’s transparent nature, IntoTheBlock extracts key indicators that paint a clear picture of what happened following the halving and highlight interesting trends.
Bitcoin Price Action experienced a similar behavior to the 2016 Halving
On one of our previous editions, we wrote about the price behavior during the 2016 Halving, in which the Bitcoin price remained almost steady for over a month, followed by a strong correction.
The real halving bull run started in September of 2016, 2 months after the Halving.
Similar to 2016, after the halving the price of the leading cryptocurrency plunged followed by uncharacteristically stagnant volatility, recording its second lowest period of 30-day volatility.
On July 28, approximately 2 months after the halving, Bitcoin price finally broke the $11,000 barrier for the first time in 349 days. At the time of writing, Bitcoin sits at around $11,838.62, and is up 36.1% since the reduction in the mining reward.
New addresses have been buying and existing ones accumulating at lower prices
Using ITB’s Historical In/Out of the Money indicator, we can observe a large shift in the number of addresses profiting when compared to the yearly low in March. The Historical In/Out of the Money provides the distribution of in-the-money (profiting) and out-of-the-money (losing money) positions over time, and allows us to determine the number of investors that would have made a profit if they had sold their position at the price at that moment in time.
If we compare the Historical In/Out of the Money today versus the halving day, we observe that new addresses have been buying and existing ones accumulating at lower prices. In the graph below we can see how the number of Bitcoin addresses “in the money” increased by 6.35 million in less than three months.
See the Bitcoin In/Out of the Money Stats
New Money has been flowing into Bitcoin
With the price of Bitcoin finally breaking the $10,000 barrier for the first time since September of 2019, it may come as no surprise that people are looking to invest in BTC.
As seen in the graph above, the number of addresses with a holding period of less than 30 days, which ITB classifies as “Traders,” has increased in the last two months achieving a 12-month high of 3.18 million addresses that hold 1.94 million BTC in aggregate.
Along with the price surge and new money flowing into Bitcoin, on-chain data supports the premise of Bitcoin’s growing appeal among institutional investors. While many within the crypto space might have shared this view for years, this belief has been increasingly spreading amongst traditional institutional investors as well. Earlier this year, renown hedge fund manager Paul Tudor Jones disclosed his investment in Bitcoin. More recently, publicly traded software company MicroStrategy invested $250 million in Bitcoin, describing it as superior to cash.
The total volume in transactions greater than $100k USD reached its highest value since August 2019 with 2.81 million BTC or $34.05 billion transacted within 24 hours. When comparing the total transacted volume in BTC versus the total transacted volume only in Large Transactions ( >$100k/trx ) from August 14th, we have observed that 95.5% of the total volume belonged to these Large Transactions.
See the Bitcoin Ownership by Time Held Stats
Bitcoin Hash Rate reached a new all-time high.
In proof of work, hash rate refers to the aggregate computational power provided by miners to validate the network (measured in Terahash per second). This measure is strongly related with a network’s security — in this case Bitcoin’s blockchain — as a higher value makes it more costly for a hacker to attempt a 51% attack.
As can be seen above the hash rate spiked to 140.46 Terahashes/second on August 14, establishing a new all-time high despite the mining reward halving.
See the Bitcoin Hash Rate Stats
Where could Bitcoin be Heading Next?
The In/Out of the Money Around Price (IOMAP) indicator reveals that the most crucial resistance level sits at that $11,995.12. Roughly 769 thousand addresses previously purchased 374 thousand BTC at the range between $11,818 and $12,165, a critical resistance level. If Bit
Looking at the levels of support, over 1.3 million addresses had previously purchased a total of 1.15 million BTC between $11,451 and $11,798. This is expected to act as support as holders in this range will attempt to remain profitable on their positions and push prices above this level.
By comparing these levels to those provided by technical analysis, we can verify buyers are expected to create strong support near the $11,600 range, while sellers will provide resistance around $11,900. The strength of these price ranges, as demonstrated by the magnitude in volume of these clusters, points to the possibility of Bitcoin going higher with much resistance if it where to break the $11,900 barrier.
See the Bitcoin In/Out of the Money Stats
This Week in IntoTheBlock Predictions
A few weeks ago, we announced the release of IntoTheBlock Price Predictions. With this release we have added price predictions for Ethereum and Litecoin, as well as more prediction models for Bitcoin. Also, we added support for a much-requested feature: notifications. IntoTheBlock subscribers will be able to obtain browser notifications for their favorite tokens based on their desired outcome (e.g. notify me when Ethereum is predicted to go up).
How Did We Do Over the Last 7 Days with our Bitcoin 50 Basis Model?
IntoTheBlock’s prediction model managed to achieve 83.33% accuracy since we started sharing our predictions. The model gave out a total of 162 predictions because it only provides one when it has a high degree of confidence. Throughout this week, the model did not dropped below 65% on any day
Our predictions for the Bitcoin 50 Basis Model have been on fire 🔥! It accurately predicted 22 price movements in a row
You are still more than welcome to follow our Bitcoin 10-basis-points model predictions on Twitter, but do keep in mind that the majority of the IntoTheBlock predictions content will reside exclusively on the IntoTheBlock platform. Make sure to subscribe to obtain notifications on the latest price predictions!
