In the last few weeks, we have seen bitcoin showcase bearing and sideways traits, but now the on-chain setup shows great divergence. We understand this by following whale activity, and for more than a month, we have seen no shift in market trends. But after the recent sell-off initiated by the miners, we see two main changes that indicate we have reached a bottom.
The first one that supports this statement made by Willy Woo is the number of entities on the chain that holds over 1000 BTC. We saw the number of whales go down for an extended period of time, but the raw number of BTC combined continues to increase.
Talking about entities, bitcoin just hit a new all-time high in terms of new “users,” not addresses, which indicates a significant network growth taking place in a short period of time. The network is back above 34,000 new users coming on a day. The price of bitcoin is testing previous lows, for sure, but the growth of adoption worldwide is something we should all appreciate.
The second change observed on the chain is raw combined BTC balance. Last week, we experienced the largest day of realized losses in bitcoin’s history, which accounted for $4,456,78,884, and everyone blamed retail. On-chain metrics show a different picture altogether. We have seen retail continue to be more aggressive than normal, as their balances show a huge spike.
At this time, whales sold 27,000 BTC, but recent whale activity shows they are scooping up more coins than usual. The difference in the sizing of withdrawals and deposits is used to support this buying behavior.
Another thing we have observed is the bitcoin liquid supply ratio. The number of holders who are likely to sell is far less than those who prefer to hold. The qualitative view of supply shock is given below, all thanks to Willy Woo:
Until last week, the on-chain showed somewhat a resemblance of price recovery, but now we strongly believe bitcoin has bottomed out. Willy Woo also mentions that if anyone goes short, they will get rekt no matter what. He also believes that fundamentals still hold all the cards and power and drive up bitcoin’s price.
Born and brought up in India, Karthikeya Gutta is a crypto journalist and freelance contributor for ItsBlockchain. He covers various aspects of the industry with in-depth analysis and research. His passion towards blockchain and crypto ecosystem is mainly because he believes it can really change the world and help millions of people.
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