‘Very Bullish’ On-Chain Metric Shows Bitcoin Set for Much Higher Prices, According to Crypto Analyst
A popular crypto analyst thinks one particular on-chain metric bodes well for Bitcoin’s (BTC) future price action.
In a new YouTube video, the anonymous host of InvestAnswers looks at Bitcoin’s yearly absorption rate on exchanges.
The analyst looks at an absorption chart from the crypto analytics firm Glassnode, which defines the metric as a comparison between the yearly rate of exchanges’ balance change to the volume of BTC mined over the same period.
Explains the analytics firm,
“This provides a relative measure of the amount of new issuance which was theoretically absorbed by this cohort. Note that values over 100% are possible as coins can be transferred from other investor cohorts.”
The InvestAnswers host tells his 446,000 YouTube subscribers that the current absorption pattern indicates “much higher prices in the future” for BTC.
“When the absorption rate is negative, like you see there on the right, this means Bitcoin is being withdrawn from exchanges — net drainage. A lot more is being pulled off than there is being deposited. Now, a negative absorption rate is usually seen as a bullish sign, because it indicates less selling pressure, suggesting investors are holding onto their Bitcoin instead of selling it on exchanges.
And in this case — this is so important — the current yearly Bitcoin absorption rate for exchanges is minus 100%.”
Bitcoin is trading at $30,040 at time of writing. The top-ranked crypto asset by market cap is up 0.86% in the past 24 hours.
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