The price of Bitcoin has consolidated between the $55,000 to $59,000 area, establishing the mid $50,000 region as support. The trend has coincided with strengthening on-chain fundamentals like the activities of whales and Bitcoin addresses.
The seven-day average active address for Bitcoin has increased concurrently since November 2020, when the asset’s price started accelerating. In a tweet, a pseudonymous trader known as “Crypto Birb” pointed out that BTC seven-day average over daily active addresses was sideways while price action had climbed. The upside trend was the strongest when backed by on-chain trends, an indication that on-chain trends have been supplementing both short and long-term BTC price cycles.
$BTC seven day average over daily active addresses in sideways while price action climbs. The upside trend is the strongest when backed by onchain trends. Big thanks to @santimentfeed for amazing data. pic.twitter.com/Qkkv10XIq3
— CRYPTO₿IRB (@crypto_birb) March 22, 2021
Data from Santiment indicates that BTC whales have been mostly accumulating Bitcoin since more than 35,000 BTC has left exchanges in the last 30 days. The latest exchange outflows have pushed down exchanges’ BTC reserves to the lowest levels since early March, the period before Bitcoin got to its all-time high above $60,000.
According to Santiment, not all BTC whales are behaving in the same manner since there have been interesting trends where 100-1,000 BTC addresses added 353k more BTC since Feb. 1st while 1k-10k addresses shed 300k BTC.
🐳🧐 As you'd expect, not all of #Bitcoin's whales are behaving in unison. However, we've seen interesting trends these past couple months, such as 100-1,000 $BTC addresses adding 353k more $BTC since Feb. 1st, while 1k-10k addresses have shed 300k $BTC. https://t.co/xLnVHxl0TV pic.twitter.com/FBTcQKMWLc
— Santiment (@santimentfeed) March 21, 2021
although 1,000-10,000 BTC addresses have been selling, Whalemap said that this range was difficult to analyse since it could include exchange addresses which are not tagged by many on-chain data gathering platforms. Therefore, it would be more precise to compare 100 BTC to 1,000 BTC and then 10,000+ BTC holding addresses.
Glassnode researchers also found out that during bull markets, old coins move more frequently. When the long-time holders make a point to sell, more selling pressure is put on Bitcoin. At the current phase, the tendency of old BTC moving is lower than 50%. They explained that in bull markets, old coins tend to move more, increasing the relative supply of younger coins in the network.
In bull markets old coins tend to move more. This increases the relative supply of younger coins in the network.
— glassnode (@glassnode) March 21, 2021
Bitcoin whales have not been selling but accumulating Bitcoin, therefore the bull trend remains intact regarding the rising U.S. 10-yr treasury yields. Risk=on markets are in most cases affected in the near term when 10-year treasury yield starts rising. For instance, in the last two weeks, U.S. tech stocks experienced a steep pullback that overlapped with Bitcoin stagnation under $60,000.
However, since Bitcoin’s on-chain data is optimistic, as long as the $55,000 support level is defended, the bullish market structure would raise the probability of a larger rally.
Image courtesy of pixabay
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