As Bitcoin’s (BTC) price hovers near $40,000, blockchain analytics firm Glassnode is weighing in on whether BTC’s recent bullish movement is just a temporary fad or here to stay.
Glassnode says that Bitcoin realized over $2 billion in profits on-chain last week after multiple months of high losses.
“This suggests there is some portion of the market who spent their profitable coins, potentially taking exit liquidity.”
Source: Glassnode
Glassnode also says that Bitcoin is seeing a rise in “younger” coins, which represent BTC that has sold within the past week.
“We have seen a notable spike in these younger coins out of what resembles a capitulation bottom. In a bullish scenario, this would subside (HODLing dominates) and/or price continues higher in spite of it (disbelief, absorbing the sell-side).
In a more bearish scenario, this starts an uptrend of ‘new young coin supply’ suggesting weakened conviction to hold the asset by old hands, and increasing liquid supply.”
Source: Glassnode
The firm says that the historically low levels of on-chain activity are not budging despite BTC’s recent price action.
“The current entity adjusted transaction count remains down 38% from the peak set in February, currently clocking 200,000 transactions daily. Whilst on-chain activity can often follow positive price action, current levels are equivalent to the 2018-19 capitulation bottom.
That said, transaction volumes are spiking higher, up 94% from the lows of $4.7B/day, to around $9.1B/day this week. This suggests that [a] demand for on-chain block-space is likely dominated by fewer, but larger size transactions at present and is an interesting combination of indicators worth keeping an eye on.”
Bitcoin is trading at $39,425.71 at time of writing, and is up 21.7% in the past two weeks, according to CoinGecko.
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