The price of bitcoin is above the $16,000-25,000 trading cluster, where most of the coins went to buyers. According to on-chain indicators, the bearish phase in the market of the first cryptocurrency is over, Glassnode noted.
Is the #Bitcoin bear market over?
With a rally 100% off the lows, $BTC is trading above a very large cluster of supply, that formed the 2022 floor.
This week, we investigate indicators showing if the market making a robust bear market recovery…or not.https://t.co/eeQ1xeE07I pic.twitter.com/PKHJc7EF18
— glassnode (@glassnode) April 17, 2023
One of the drivers of the price doubling from the lows of November was the turbulence in the US banking sector and, as a result, the growing perception of the first cryptocurrency as a “reliable asset”.
Analysts drew attention to the strengthening of the correlation of gold with its digital counterpart on a 30-day, three-month and annual basis against the background of an increased need for “hard money”.
The experts found a predominance of buying among hodlers before the FTX collapse (they currently hold 14.16 million BTC) and a generally neutral sentiment among speculators after this episode in history – the number of coins they held over the past 155 days fluctuated around the current 2.914 million BTC.
Having distributed UTXO by price levels and groups, analysts have identified three important clusters:
- < $25,000 – most coins changed hands between June 2022 and January 2023, roughly evenly divided between hodlers and speculators;
- $25,000 to $30,000 – recent acquisitions (7.25% of BTC in circulation) reflecting a combination of profit taking and tech buying after breaking the $25,000 psychological level;
- > $30,000 – long-term investors “surviving” in the bear market (22.2%).
The experts indicated that the strength of the market since the beginning of the year has been supported by the explosive growth in the number of coins held at a profit.
A bear market bottom is characterized by widespread capitulation, which is accompanied by an equal and opposite influx of demand to absorb it. When the price leaves the medium-term extreme formation zone, the “buyback” bitcoins return to profit.
In 2023, a total of 6.2 million BTC (32.3% of the supply) acquired this status. This gives an idea of how large the cost base is (at prices below $30,000), the specialists emphasized.
Despite the price doubling from the lows, experts do not record a significant increase in the costs of the “old” coins. The chart below shows that bitcoins less than three months old are still less than 20% of the “wealth” commonly associated with bear cycle lows.
The reverse is also true – the characteristic for owners of coins “older” than three months is 80%, despite the crypto winter during 2022.
In conclusion, analysts noted the high on-chain activity. The daily number of transactions exceeds 270 thousand, which can bring the monthly metric closer to the cyclical maximum. In part, analysts explained the trend by the continued interest in the Ordinals project – the number of bitcoin-NFTs exceeded 1 million.
Earlier, Ark Invest analyst Yasin Elmanjra predicted that the price of bitcoin would reach $1 million in the next decade.
According to the survey, the major players in the industry remain bullish and predict a rise in quotes to $100,000. Analysts at Bank of America also allowed the digital gold rally to continue.
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