Weekly Onchain Insights: The current state of Bitcoin
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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.
This Week Analysis: The current state of Bitcoin
On March 25, with the record-breaking $6.1 billion options expiring today, Biitcoin experienced a sell-off that dropped the price below $50,500. There’s a lot of especulation happening around the new contracts set to expire on April 30, with investors placing their bets on a strike price of $80k.
Bitcoin price is currently sitting at $53,271.95 and investors seem to be uncertain about its next potential move. By analyzing the profitability of traders near the current price of BTC, we can understand the circumstances and price ranges expected to act as support and resistance now.
At the time of writing, Bitcoin bulls and bears are fighting to claim the highly-contested price around $53,000. The IOMAP indicates a large cluster of addresses (677k) and volume (440.097k BTC) had been bought slightly below $53,270. This price range, which already saw high levels of trading activity, points to the likelihood of investors looking to buy back near this range and create support before price lowers further. If this range is broken, there’s a similar area with a concentration of buyers between $48,503 and $50,132. Here, approximately 639.2k addresses had previously purchased roughly 348k BTC.
But despite the recent downward price action, on-chain indicators are looking as strong as before. At IntoTheBlock, we classify an address with a holding time of over one year as a hodler. As can be seen in the graph below, the number of BTC hodlers has increased by over 2.84 million within the last twelve months.
Our Hodlers indicator has continuously shown an almost linear growth every month, despite Bitcon recent price action, it is now at about 21.55m addresses, an All-Time-High for this metric, and it represents 57.96% of the total BTC holders.
This hodl trend can also be represented by the number of old coins that have been moved over the past six months. IntoTheBlock’s UTXO Age indicator is helpful to grasp the volume of transaction activity occurring relative to the blockchain’s historical transactions.
The UTXO Age metric is helpful to understand long-term market cycles. When long-term UTXOs (marked in green to blue waves) are decreasing it points to older coins will be sold for profit, suggesting an end to the bull cycle. But that doesn’t seem to be the case, as investors are holding to their BTC assets.
With a current circulating supply of 18.664 million, at least 9.49m BTC hasn’t been moved in over 12 months, and taking into consideration that a large portion is reported to be lost or stolen, it is clear that investors see that this bull-trend still have a long way up, increasing the supply scarcity of the asset.
As the UTXO Age indicator suggests that short-term unspent transactions outputs are moving the market, denotes a high amount of transaction volume taking place and new holders entering coming in.
The Transactions Volume indicator measures the aggregate volume of transactions recorded on-chain. This version of the indicator tracks the volume in crypto terms (i.e. USD instead BTC).
As can be seen in the graph above, the transaction volume has been on a consistent uptrend throughout the last year. This growth in volume can be interpreted as a sign of confidence in the current break-out, but the question remains if this short term traders are accumulating or rushing to exit their positions.
Overall, despite the recent price action, on-chain data suggest that Bitcoin remains strong. With increasing adoption from institutional investors and analyzing the current market cycle, looks like the bull-run is not over.
