As whales, miners, and long-term hodlers turn bullish again, on-chain data indicates Bitcoin price will likely breakout to a new all-time high soon.
For the past two months, the price of Bitcoin (BTC) has been under extreme selling pressure by whales, according to on-chain results.
Five key indicators, on the other hand, indicate that major sellers are about to revert to hodlers or even accumulators of Bitcoin, while institutional demand remains high.
This is a powerful setup that could propel Bitcoin to new all-time highs in the near future.
- Whales stopped selling
Since February 8, the number of whales, or Bitcoin addresses with a balance of 1,000 Bitcoin or more, has decreased by more than 10%, indicating a significant sell-off of Bitcoin.
Though Bitcoin reached two all-time highs during the two-month dumping phase, the overall price increase has slowed significantly, with BTC encountering stiff resistance at around $60,000. M has been around since Since March 31, has stopped selling.
Portfolio rebalancing at the end of the quarter is a popular period for sell-offs. This was to be predicted, given Bitcoin’s 104 percent price increase since the beginning of the year. On April 6, Grayscale, the world’s largest digital asset manager, revealed that it had just rebalanced its digital large-cap fund by selling Bitcoin.
If rebalancing is the main driver, and the number of addresses carrying 1,000 BTC or more has returned to levels last seen at the end of 2020 — when the price began to rise — whales may have finished selling for the time being.
2. Long-term hodlers selling Bitcoin are slowing down
When Bitcoin surpassed its previous 2019 peak in October 2020, it began one of the largest and most sustained rises in coin days demolished history (CDD).
Long-term hodlers are selling at a “weight” expressed by the CDD on-chain metric. It’s determined by multiplying the total number of coins in a transaction by the number of days since those coins were last spent. That is to say, higher the CDD is, the more volume is sold.
However, since the beginning of the year, selling by long-term hodlers is not only drastically slowing down but has almost come back to the level at which the sell-off was initially triggered in 2020.
This means that long-term hodlers are becoming more optimistic about a rise in Bitcoin’s price in the near future.
3. Miners have turned into Bitcoin accumulators again
Because Bitcoin miners’ revenue stream is newly mined BTC, they regularly have to sell their mined BTC to pay for their operational expenses such as electricity costs. However, some miners tend to speculate on the price.
By holding back on selling Bitcoin, they become net accumulators. This is expressed in the miner net position change.
The last time miners were reluctant to sell their Bitcoin was almost three months ago, just before a significant price surge. This upward trend indicates that miners anticipate higher prices in the immediate future.
4. Institutional demand remains high.
Institutional demand for Bitcoin has not slowed despite significant selling pressure from whales.
The net transfer amount of Bitcoin from/to exchanges is in the red, almost at an all-time low, implying that more Bitcoin is being withdrawn from exchanges than deposited at the moment.
This indicates that the coins are being moved to cold storage. This is characteristic of institutions, since they tend to make long-term investments and prefer to store them in a secure environment rather than on an exchange.
There has been a historic supply crunch of trade Bitcoin balances since the pandemic. Since November 2020, organizations have begun to accumulate in greater amounts, making it even more material.
The large continuous drop in Bitcoin balances on exchanges in recent months, especially Coinbase, which is a popular option for institutions, demonstrates this.
Meanwhile, Coinbase released its quarter one earnings and outlook yesterday, in which it states:
“Assets on Platform of $223 billion, representing 11.3% crypto asset market share, includes $122 billion of Assets on Platform from Institutions. … We expect meaningful growth in 2021 driven by transaction and custody revenue given the increased institutional interest in the crypto asset class.”
Not only is it certain that institutions have materially added to their revenue, but this data also shows Coinbase’s confidence that this trend of buying is likely not going to stop soon.
5. Weekly ascending triangle close to a break
Since the beginning of February, a weekly ascending triangle has formed. Statistically, this chart pattern gives a higher likelihood of breaking to the upside than to the downside.
The scale of the triangle indicates a possible breakout target of $79,000 if the stock breaks to the upside. While neither the upside break nor the price goal are certain, it is a chart worth watching alongside big on-chain signals.
Long-term hodlers, miners, and whales are all expressing faith in Bitcoin’s rising price. The ascending triangle adds to the likelihood that this transition will occur soon and to the upside.
Although a Bitcoin price of $79,000 in the immediate future would be welcomed, a collapse of the triangle is also a possibility that should be considered.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.