According to the network, the price of bitcoin (BTC) has come under strong pressure from sellers in the last two months.
However, five key indicators indicate that large sellers are once again on the verge of becoming traders or even aggregators of bitcoin, while institutional demand remains strong. This is an explosive setup that could push Bitcoin to a full-time high in the near future.
Whales stopped selling
The number of whales that are bitcoin addresses with a balance equal to or greater than 1000 bitcoins, has decreased by more than 10% since February 8, which indicates a large sale in bitcoin.
Although the bitcoin price managed to reach a full-time high during the two-month dumping period, the overall price increase decreased sharply and BTC met strong resistance of around $ 60,000. As of March 31, however, the largest Bitcoin owners have stopped selling.
Portfolio rebalancing at the end of the quarter is a typical sales time. Since the price of Bitcoin has risen 104% since the beginning of this year, this was to be expected.
Grayscale, a leading digital asset manager, announced on April 6 that it had just balanced its massive digital equity fund with the sale of bitcoins.
If rebalancing is the main driver and given that the number of headlines equal to or greater than 1000 BTC has returned to levels last seen at the end of 2020 – when prices began to rise – sales of whales could be stopped for now.
Long-term traders who sell bitcoins are slowing down
When Bitcoin reached its previous highs in 2019 in October 2020, it marked the beginning of one of the fastest and longest collections for the Destroyed Days (CDD) coin.
The electronic giant’s Advance Detection scale expresses the “weight” that long-term employees sell. It is calculated by multiplying the number of coins in a transaction by the number of days that have passed since those coins were last used. This means that the higher the CDD, the greater the sales volume.
Since the beginning of the year, however, sales from longtime hackers have not only declined significantly, but have almost returned to the level where they originally started in 2020.
This indicates that long-term traders are becoming more and more confident that the price of bitcoin will rise in the near future.
Miners turn to Bitcoin complexes again
Since bitcoin miners receive a revenue stream from newly extracted BTC, they must regularly sell mined BTC to cover operating costs such as electricity costs. However, some miners tend to speculate in the price.
By refraining from selling bitcoins, they become a pure accumulator. This is reflected in the net mining position scale, which shows a 30-day change in storage to be displayed in mine addresses.
A net change in the position of bitcoin mines. Source: Glass Node
The last time miners were reluctant to sell their bitcoins was before the rise in prices almost three months ago. This positive change indicates that miners are looking forward to price increases in the near future.
Institutional demand remains high
Despite pressure from whale sellers, institutional demand for bitcoin has not declined. The net transfer of bitcoins to / from stock exchanges is in deep minus, close to historical downturns, which means that more bitcoins are currently withdrawn from the stock exchanges than deposits.
This is a sign that these coins are moving into cold storage. This is typical of companies as they tend to make long-term investments and prefer safer incubation solutions instead of leaving them on the stock exchange.
In the wake of the pandemic, there has been a historic supply crisis with bitcoin exchange balances. This becomes more and more important as the institutions began to accumulate in large numbers from November 2020.
This is evident from the steady decline in the bitcoin balance on stock exchanges in recent months, especially Coinbase, which is often the preferred choice of institutions.
Meanwhile, Coinbase launched its first quarter earnings and forecast yesterday, saying:
Assets on the platform, valued at $ 223 billion, account for 11.3% of the market share of cryptocurrencies, including $ 122 billion in assets on the platform from institutions. … We expect significant growth in 2021 from sales and custody income, taking into account the increase in institutional interest.