Cryptoquant Data Reveals the Power Behind Bitcoin’s Latest Price Surge

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August 8, 2024 Bitcoin.com

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Historical cycle data suggests Bitcoin has left the ‘danger zone’ — Analyst

May 14, 2024 Coin Telegraph

Six on-chain metrics suggesting Bitcoin is a ‘generational buying opportunity’

January 25, 2023 Coin Telegraph

Accumulation

Six tried and tested on-chain metrics are repeating patterns last seen at the bottom of the past three bear markets.

Several on-chain metrics from the Bitcoin (BTC) network are flashing buy signals following this year’s rally.

Bitcoin has broken out of its torpor to notch up a 37% gain since the beginning of 2023. However, on-chain data is still signaling it could be a “generational buying opportunity” according to analysts.

On Jan. 24, researcher and technical analyst “Game of Trades” identified six on-chain metrics for his 71,000 Twitter followers.

The first metric is an accumulation trend score highlighting zones of heavy accumulation in terms of entity size and the number of coins bought.

“Large entities have been in deep accumulation mode ever since the FTX collapse,” the analyst noted before adding “similar accumulation took place in the 2018 and 2020 bottoms.”

Bitcoin: 6 on-chain metrics calling for a generational long-term buying opportunity

A thread
— Game of Trades (@GameofTrades_) January 23, 2023

The Bitcoin entity-adjusted dormancy flow is a measure of the ratio of the current market capitalization and the annualized dormancy value.

Whenever dormancy value overtakes market capitalization, the market can be considered in full capitulation which has been a good historical buying zone.

According to Glassnode, this metric fell to its lowest-ever level in 2022.

*BTC entity- adjusted dormancy flow. Image: Glassnode*

Bitcoin’s reserve risk can be used to measure the confidence of long-term holders relative to the price of BTC. This also fell to its lowest-ever level at the end of 2022, according to Glassnode data.

Bitcoin’s Realized Price (RP) is the value of all coins in circulation at the price they last moved, in other words, an estimation of what the entire market paid for their coins.

According to Woo Charts, Bitcoin has been trading below this level since the FTX collapse until Jan. 13. It is currently just above the RP which represents another buying opportunity.

The Bitcoin MVRV Z-score shows when BTC is significantly over or undervalued relative to its ‘fair value’ or realized price. When the metric leaves the extremely undervalued zone it is often considered the end of the bear market.

Finally, there is the Puell Multiple examining the fundamentals of mining profitability and its impact on market cycles.

Lower values, as they are at the moment, indicate miner stress and represent long-term buying opportunities.

The analyst concluded these six on-chain metrics are “pointing towards an exceptional risk-reward setup in Bitcoin.”

The metrics are all at similar levels to market cycle bottoms in 2015, 2018, and 2020, they added.

BTC is currently trading down over 1.9% over the past 24 hours at $22,675, according to Cointelegraph data.

Wait and see approach: 3/4 of Bitcoin supply now illiquid

January 5, 2022 Coin Telegraph

Accumulation

Around 76% of the total circulating Bitcoin supply is now illiquid according to on-chain analytics from Glassnode.

Bitcoin markets have been consolidating since the beginning of the year, but on-chain metrics are painting a more positive picture as more of the asset is becoming illiquid.

On-chain analytics provider Glassnode has been delving into Bitcoin supply metrics to get a better view of the longer-term macro trends in its weekly report on Jan. 3.

The findings revealed that although the asset has been trading sideways so far this year, more BTC has become illiquid. There has been an acceleration in illiquid supply growth which now comprises more than three quarters, or 76%, of the total circulating supply.

Glassnode defines illiquidity as when BTC is moved to a wallet with no history of spending. Liquid supply BTC, which makes up 24% of the total, is in wallets that spend or trade regularly such as exchanges and hot wallets.

“We can see that over the final months of 2021, even as prices corrected, there has been an acceleration of coins from liquid, into Illiquid wallets.”

The figures suggest that more Bitcoin is being transferred into storage indicating an increase in hodling habits and accumulation. The decline in highly liquid supply also hints that there may not be a major selloff or capitulation event at any time in the near future.

BTC liquid and illiquid supply as a percent of the total: Glassnode

The researchers concluded that these conditions indicate “divergence between what appears to be constructive on-chain supply dynamics, compared to bearish-to-neutral price action.”

In the same report, Glassnode stated that the total supply held by long-term holders has plateaued over the past month or so. This suggests that longer-term investors have stopped spending or selling coins and have become hodlers or even accumulators at this stage. “This provides another constructive view of market conviction,” it concluded.

The current supply held by long-termers is 13.35 million BTC, a decline of just 1.1% from October’s high of 13.5 million coins. Glassnode defines these long-term holders (LTH) as wallets or accounts that have held their Bitcoin for more than 155 days.

Big Miners and Holders Keep Accumulating Bitcoin: Kraken’s ‘Shocktober’ Report

October 29, 2021 Bitcoin.com

Bitcoin outflows from centralized exchanges surge to 100K BTC monthly

August 3, 2021 Coin Telegraph

Accumulation

Centralized exchanges have experienced their heaviest week of Bitcoin withdrawals since November 2020.

Bitcoin outflows from centralized exchanges have surged to their highest level year-to-date, with roughly 40,000 BTC being withdrawn over the past seven days.

According to the Glassnode’s August 2 The Week On-Chain report, Bitcoin outflows have accelerated to a rate exceeding 100,000 BTC per month for just the third time since September 2019. The on-chain analytics provider estimates that just 13.2% of circulating BTC are currently held on exchanges — a new low for 2021.

“This represents a near full retracement of the significant inflow volume observed during the May sell-off,” the report noted.

*BTC Exchange Net Position Change - Glassnode*

Outflows surged to nearly 150,000 BTC monthly at the end of April 2020 following the violent “Black Thursday” crash that saw crypto prices tumble by more than 50% in less than two days after then-U.S. President Trump announced a travel ban between Europe and the U.S. in March as the coronavirus pandemic intensified. Despite the aggressive crash, Bitcoin had rebounded by 150% by the end of May 2020, driving heavy accumulation.

Outflows again came close to 150,000 BTC monthly in November 2020 as Bitcoin surged to test its then-record price high of $20,000, with BTC rallying into new all-time highs the following month.

Glassnode notes divergent trends between Coinbase and Binance throughout most of 2021, with Coinbase having experienced significant outflows while Binance has been the largest recipient of BTC.

However, Binance’s reserves are now beginning to dwindle, with 37,500 BTC (worth roughly $1.5 billion) exiting the exchange over the past week.

Coinbase balances remained steady in June. While the exchange received 30,000 BTC in mid-July, 31,000 BTC was withdrawn from the platform this past week.

Looking at the macro sentiment, the on-chain analytics provider referred to its “Liveliness metric” to identify trends in accumulation.

The metric, which measures the ratio of the sum of coin days destroyed and the sum of all coin days ever created, indicates a broad trend of accumulation following May’s immediate sell-off.

“It seems that HODLing and accumulation is the most likely dominant trend in the on-chain market,” the report concluded.

Accumulation

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