Bitcoin has regained its $ 1 trillion market cap after months of trouble. Low prices offer not only institutional but also retailers the opportunity to accumulate. This can be seen in the massive transactions on the blockchain.
According to Glassnode, many transactions valued at more than $ 10 million have been carried out on the network in the past month.
Relative BTC transfer volume by size | The source: Glass knot
According to the market observer and Chinese blockchain journalist Colin Wu, the share is over 70%, which is a record high.
This increase occurred in particular when the market stabilized after the Chinese ban. Miners have moved to another region and traders have finally gained a foothold. This could cause the price to climb towards the previous all-time high (ATH).
However, a single metric cannot determine the sentiment of the Bitcoin market, as observers note that the three largest whales have sold nearly 50,000 coins in the past few days. Twitter user Leverage Monkey share:
“Whales are falling over. The 3 largest whales have only sold around 50,000 coins in the past few days. These wallets always sell on top. Lets see what happens…”.
The source: Use monkeys
Meanwhile, others are also concerned that BTC will fall again. However, JP Morgan Chase recently drew customers’ attention to the bitcoin craze. The longtime American investment bank believes that Bitcoin seems to be a better inflation protection than gold. In his note, JP Morgan states:
“The resurgence of investor inflation concerns has renewed interest in using Bitcoin as a hedge against inflation. Institutional investors seem to be returning to Bitcoin and may see it as a better hedge against inflation than gold. “
The bank also highlighted the trend for institutional investors to move away from gold and towards bitcoin. While BTC has flourished with an average CAGR of over 200% for the past 10 years, gold has been flat this decade. JP Morgan listed 3 main drivers driving the BTC rally.
First, “recent assurances from US politicians that there are no intentions to ban the use or mining of cryptocurrencies like China”. Second, “investors’ concerns about inflation have returned” and third, “the recent development of the Lightning Network and Layer 2 payment solutions as El Salvador accepts Bitcoin as legal tender.” France “.
Bitcoin’s popularity is undeniable in the face of these adversities. China’s crypto ban slowed market momentum, but as soon as participants adjusted, another bull run ensued. While it is impossible to say for sure about the immediate future of Bitcoin, institutions are likely to become long-term owners.
Why do Bitcoin investors need to “contain upward sentiments” right now?
The Bitcoin price has been rising continuously for more than 10 days. From a decline to $ 42,000 in late September to over $ 56,000 at press time, the rebound has been rapid and powerful.
However, investors still need to be careful during this period of rapid market growth. Because often the chance of a trend reversal is as quick as an asset’s price increase.
Bitcoin price 4-hour chart | Source: TradingView
Currently the total supply is profitable at 92.92% and is only 2% away from the top of the market. In just 12 days, around 16% of the coins lost in September became profitable again.
Profitable percentage of Bitcoin supply (gold) | Source: Glassnode
From a technical point of view, a market high should lead to a price decline. Additionally, this week’s 17% surge, combined with BTC still rising, could result in a market high soon.
There have been exceptions in the past like the Bull Run which brought the price to ATH in April, but when Bitcoin hit the same 95% zone in May we saw a wave. The next range is unlikely to sell off, but we can never be sure what will happen, so it is better to “prevent than cure”.
Therefore, to ensure there is no significant negative impact, Bitcoin investors should steer clear of bullish sentiment for a period of time. Because even at the time of writing, buy orders dominate over sell orders, and that number stands at nearly $ 1.1 billion (20,000 BTC).
Bitcoin buy and sell orders | Source: Intotheblock
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According to AZCoin News