Bitcoin's Bull Run Yet to Ignite Despite 120% Surge: An Inside Look
Summary:
Despite Bitcoin surging 120% this year, market frenzy typical of a bull run isn't yet evident. Data suggests only a small proportion of on-chain transactions involve recently acquired bitcoins. While small wallets increase, speculative short-term holding is low. Philip Swift of Look Into Bitcoin used the RHODL metric as proof, which illustrates trends in the age and last moved price of Bitcoin supplies. An analysis added that those who increased their Bitcoin exposure prior to 2021's high are still at a loss, predicting a possible breakeven if Bitcoin continues rallying past $39,000.
Despite Bitcoin's price surging by 120% this year, the market fervor typically associated with a Bitcoin bull run does not yet seem to be in full swing. Analysis of data from Look Into Bitcoin, a statistical platform, shows that only a fraction of on-chain transactions currently involve recently acquired bitcoins. Bitcoin's value remains strong, lingering near highs not witnessed in 18 months and surpassing several key resistance levels as well as its previous bear-market trading territory.
Despite an increase in the number of smaller Bitcoin wallets, significant speculative activity - short-term holding of Bitcoin - seems to be missing. Early signs of this trend were flagged by Philip Swift, the founder of Look Into Bitcoin, on November 16. Swift used the Realized Cap HODL Waves metric (RHODL Waves) to support his stance. This metric segments the overall Bitcoin supply by age and compares it to the price at which the coins were last moved on-chain. In bull markets, spikes are seen in coins that move frequently, while bear markets see a reverse trend with coins held due to fear of selling at a loss or due to holdings being unprofitable at current prices.
Swift noted a slight uptick in the movement of the 'younger' coins on-chain but he added that the typical fever of a bull market isn’t here yet. According to him, we are still in the early stages.
The examination also examined the trend of Bitcoin supply "age bands". Those who ramped up their Bitcoin holdings just prior to 2021's peak are seemingly still operating at a loss, according to a contributor for on-chain analytics platform, CryptoQuant. Using the Net Unrealized Profit/Loss (NUPL) indicator as a measure of profitability for stored coins, he predicted a possible breakeven point if Bitcoin continues to rally past $39,000.
As of now, only 11.6% of unspent transaction outputs (UTXOs) are operating at a loss, as per CryptoQuant data. Meanwhile, it has been reported that large Bitcoin holders have been selling off their assets at the current prices.
This news summarises the current state of Bitcoin and should not be perceived as investment advice. Individuals must undertake their own research to make informed decisions about investment and trading, each of which carries its own set of risks.
Published At
11/17/2023 11:42:20 AM
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