A lot of uncertainty is building up in the crypto markets after the crash that happened 12 days ago. The on-chain metrics have changed significantly in the last two weeks, and we are seeing a major shift in the mindset of a normal retail investor. A majority of short-term holders are now starting to think differently, and they are preparing for a long-term position. After conducting extensive on-chain research, we found out that the coins transferred to the exchanges before the dump are now coming back to the wallets, and net outflows from all exchange reserves are observed.
In the last weeks, we have also seen more accumulation addresses (7430 new ones in 7 days) than before, and this mainly indicates that short-term holders are now becoming long-term holders. The low prices of bitcoin and other cryptocurrencies have also attracted new entities. Based on the technical support and on-chain analysis, we see anywhere between $40k-60k being the upside, and if things go south and bitcoin drops below $30k, the next support line is only $20k.
Major players have nearly acquired 50,000 bitcoins in the last few weeks, so it is safe to say that we are in an accumulation phase, and most of the investors are waiting for a confirmation on the upside. While retail investors have gained confidence and bought at these lower prices, technical traders still seem to be hesitant to take long-term positions. Most of these traders are taking intraday trades- buying at the bottom and selling on the same day itself.
Another big thing to look out for is- total supply held by long-term holders. We are seeing something entirely new in this period of the cycle, where long-term holders are continuing to accumulate, and short-term investors are starting to get speculative and selling off their share of coins. In previous cycles, both retail and long-term investors crossed paths for an extended period, but in this cycle, we are seeing the gap between both increase.
It would be pleasant to see a much wider distribution for short-term and retail investors, but they have to decide to hold their positions with a long-term mindset. Right now, these accumulation addresses are holding the fort, so we have to see more short-term holders in this position to get a long bull market in the coming months. Slight evidence of this is given below:
The newer entities we mentioned before are increasing on-chain, and the number of whales in the market is decreasing. Now, it depends whether these entities will hold for long-term or sell once they have booked small profits.
If we come to miners and how they have been accumulating during this dip in the market, we can see below that it is going sideways from the peak and it is most likely because of the crackdown from the government. Some sources also highlight that mining machines are being moved to a new location because of the wet season.
Now the main question- is the bull market still intact?
From a long-term perspective, we are seeing bullish signs and the major metrics also support this statement. However, in the short term, it is better to stay positive but also be speculative about market movements.
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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