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Evidence of Bullish Trends in Bitcoin's Onchain Data

Sep 15, 2023 at 10:23 am

Despite the surface calmness of the market, subtle shifts in onchain data indicate a growing inclination towards bullish trends.
BTC price and recent active supply data sourced from Blockware Solutions and Glassnode.

BTC price and recent active supply data sourced from Blockware Solutions and Glassnode.

Beneath the seemingly tranquil façade of the cryptocurrency market, there exists a latent optimism for Bitcoin (BTC), suggesting the potential for a substantial surge in price.

As per insights from Blockware Solutions and Glassnode, the proportion of actively traded Bitcoin within the past month plummeted to a historically low 5.4% earlier this week. This drop signifies a reduction in coin circulation, indicating a weakening on the supply front. Currently, the circulating supply of Bitcoin totals 19.48 million.

Blockware Solutions emphasized in a communication, "Price dynamics are determined at the margin, which implies that those engaging in frequent Bitcoin transactions heavily influence short-term price movements. With the ongoing increase in supply-side illiquidity, as evidenced by reduced supply turnover, any catalyst in demand could lead to a substantial price surge."

Approximately 70% of the circulating supply has remained dormant for over a year, underscoring a significant portion of holders adhering to a 'buy and hold' strategy. According to Glassnode's definition, long-term holders are addresses that retain coins for a minimum of 155 days.

Anticipating Positive Triggers

Besides the forthcoming launch of a spot Bitcoin-exchange-traded fund (ETF), still a few months away, prevalent macroeconomic and regulatory concerns lean towards a bearish sentiment.

David Lawant, the Head of Research at FalconX, highlighted, "The macroeconomic scenario is currently more uncertain than ever, and the prevailing sentiment of 'higher for longer' could exert a constraint on risk assets, including the crypto market. Additionally, there's potential selling pressure stemming from government-seized wallets, Chapter 11 portfolios, and substantial token unlocks expected over the next 6-12 months. Finally, there's an air of uncertainty regarding whether further regulatory actions will be taken in the U.S."

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