High On-Chain Activity and Accumulation Mimic Bitcoin's Mid-2020 Behavior
Summary:
CryptoQuant CEO, Ki Young Ju, noticed a parallel between the current Bitcoin market and mid-2020, revealing high on-chain activity and significant Bitcoin accumulation. Despite low price volatility, on-chain activities remain high, with daily additions of $1B to new 'whale' wallets. This pattern reflects the 2020 accumulation phase, which led to Bitcoin's surge to around $29,000 by year's end. Experts believe Bitcoin is grappling with its "last resistance" before establishing new record highs.
CryptoQuant's Founder and CEO, Ki Young Ju, pointed out a distinct resemblance between the present Bitcoin market behavior and that observed in the middle of 2020. According to Ju’s recent post on May 31, there was a notable increase in on-chain transactions and a steep rise in Bitcoin accumulation, which mirrored the 2020 accumulation period that ultimately led to the Bitcoin surge to $64,000 in April 2021. "The same atmosphere surrounds Bitcoin as in the middle of 2020. Then, Bitcoin fluctuated around $10k for half a year, which was later connected to OTC transactions due to the high on-chain activity. Now, even amidst low price fluctuations, on-chain activities remain high, with an addition of $1B into new ‘whale’ accounts each day, probably in the form of assets under custody." CryptoQuant was unable to provide any comments to Cointelegraph before their reporting deadline.
Bitcoin Whales: High Activity, Minimal Volatility
Despite subdued price volatility, Ju's graph showing "BTC: Realized Cap for New Whales" points to a significant influx into Bitcoin. While this pattern might suggest that Bitcoin whales are accumulating and the market interest is growing, community reactions to Ju's revelations were mixed.
Regarding Bitcoin’s accumulation phase in 2020, the price of Bitcoin hovered around $10,000 for a stretch of months, and the rise in on-chain activities was later linked to over-the-counter transactions as Ju noted. This high activity and the corresponding accumulation phase eventually caused Bitcoin’s price to spike to nearly $29,000 by the end of the year.
In comparing the present situation, Ju's 2024 vs. 2020 chart shows that the current market trends strongly mirror previous sequences leading to a bull run, thus setting lofty expectations.
Market Projections
As crypto market observers have deduced, Bitcoin is presently grappled with its "last resistance" of $69,000 before establishing new record highs following the 2021 bull run. Despite speculation within the community, stirred by the ongoing daily $1 billion BTC accumulation, CryptoCon, a pseudonymous crypto analyst, recently characterized the current stability at previous highs as "healthy price action.
Published At
5/31/2024 11:04:46 AM
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