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The Capital

Bitcoin Whale Holdings Surge since USD Money Supply Expansion

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Hi Everyone,

When prices take a dip, bitcoin has a tendency of demonstrating its anti-fragile properties, or as Rocky would put it: “it’s not about how hard you can hit, it’s about how hard you can get it and keep moving forward.”

Amidst an endless sea of uncertainty, bitcoin’s fundamental data continues to fly in the face of naysayers and doom bringers. And here’s a shocker: it will continue to do so. This is no longer an experiment.

Let’s dig in.

Bitcoin hashrate breaks through 150 TH/S

A recurring theme in bitcoin’s 10-year history is its ever-increasing computing power, which seemingly defies price fluctuations as if they were irrelevant.

Over the last few days, bitcoin saw a near $2000 drop, dragging out the closet doom-bringers into the limelight once again. However, this perspective does not align with a medium-to-long-term outlook on bitcoin.

Indeed, calls for “long-term” expectations are fast approaching their due-date and it’s becoming even riskier to wait for the right moment to buy in; arguably because we’re at that moment right now. It beggars belief that some people who have been putting off purchasing even small amounts of bitcoin since its $3,000 price-tag in March still have not learned yet.

In any case, as bitcoin meanders at the $10,000 level, the network’s hashrate set a new all-time high, breaking the 150TH/s plateau for the first time in history.

For the uninitiated, hashrate is a major indicator that determines the health of the bitcoin network. It represents the amount of global computing (hashing) power securing (or mining) the network, and can also be interpreted as the amount of energy dedicated to protecting the network from possible 51% attacks.

While it’s arguable that miner influence has come down due to the bitcoin halving, miners are some of the most important players in the bitcoin space and their continued pouring of resources into the network have been a long-standing indicator of growth, irrespective of scary headlines and altcoin ploys that would have you give up your digitally scarce asset.

Notably, network growth is a medium to long-term indicator, which is to say that the minimum estimated time-frame for a tangible effect to be recognized in bitcoin’s price is a couple of weeks to months. For hodlers hedging against traditional markets, economic uncertainty, and cash, this indicator is music to their ears.

Whale bitcoin holdings increase significantly since the USD money supply expansion

Meanwhile, bitcoin analyst Willy Woo has pointed out that since the last round of massive USD printing, bitcoin investors have gone out of their way to increase their bitcoin holdings even further.

Many look at the BTC price and doubt it’s a hedge. High net worth individuals and funds certainly consider it to be true and betting on that with real money.

Since this latest round of USD money supply expansion, whales entities have increased their holdings of BTC markedly.

- Willy Woo (@woonomic) September 8, 2020

According to these on-chain metrics, smart money is both moving the market and piling into bitcoin.

Technically speaking

4-hour (LTF) suggests a $10,500 retest is possible

Not much has happened since the last mailout on Monday other than repeated failed tests of the $10,000 level. As such, let’s zoom in on the lower time-frames for more details.

Bitcoin has been trading just above $10,000 for days and to bulls’ delight, stubbornly refuses to drop further. As it happens, a notable bullish divergence has developed on the 4-hour time-frame, such that the RSI (relative strength index) is printing higher lows while bitcoin’s price remains more or less stable around $10,000.

While this is a good indicator for a possible bounce, however, bitcoin has yet to reclaim the 20-EMA on this lower time-frame (white line).

As per the last newsletter, bitcoin found support at the weekly 20-EMA — which has historically marked a strong bull market when held. Therefore, it’s reasonable to say that several time-frames are at a deciding moment.

In order for this entire down-wards move to be considered a mere blip, the first target for bulls will be the $10,500 support-turned-resistance area. Irrespective of the coin’s trajectory for the next couple of days, there’s a good chance that bitcoin will re-test this region this week, pending a decisive break below $10,000.

Ultimately, simply holding $10,000 would be enough for bullish momentum to take over, given that bearish follow-through is now anticipated after the sharp drop.

On the flip side, the prospect of a $9,550 bitcoin is still in the cards, and shouldn’t be underestimated.

Long story short, the crucial prices to watch on the 4-hour chart are:

  • Close above 20-EMA suggests $10,500 retest
  • Price acceptance above $10,500 suggests an $11,000 retest
  • Rejection at $10,500 suggests $10,000 retest
  • A close below $10,000 suggests bearish continuation to $9,500

Having said that, bitcoin is in a precarious situation at the moment so anticipating these levels as support & resistance zones is far safer than knife catching attempts or chasing trades. Needles to say, this is not financial advice. Take care of your money.

May your gains be high and your losses low.

Catch you next time.

As always, thanks for reading! Don’t forget to share this content and support the platform. These write-ups take time and no small amount of research. Referrals, business opportunities and feedback are highly appreciated.

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Read More: Bitcoin-stablecoin metric reveals ‘intense’ buy pressure

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Best regards,

Christopher Attard
Founder of Chris on Crypto
Contributor to
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Chris on Crypto

Chris on Crypto


Journalist-turned crypto-writer & analyst; forging the narrative, stacking sats.