Glassnode data showed that the year-on-year rise in prices in the bitcoin (BTC) market and hopes of further upward movement in the future forced traders to hold the token instead of trading it with other assets.
On October 28, the blockchain data analysis service revealed that the total number of “coins saved or lost” reached a nine-month high of over 7.21 million BTC. Simply put, the scale of Bitcoin reflects an increase in the number of tokens out of circulation – those that may have been held in cold wallets by long-term holders or lost due to human error with little chance of recovery.
BTC is the number of coins collected or lost. Source: Glassnode
As a result, the total amount of lost / accumulated bitcoins exceeded 34% of the total supply of 21 million tokens, making the cryptocurrency even rarer.
More evidence of Bitcoin supply shock
Additional data provided by CryptoQuant showed that the volume of Bitcoin reserves across all cryptocurrency exchanges fell to its lowest level since August 2018 – 2.337 million BTC on October 28, 2021.
Meanwhile, the Miner Status Index (MPI), which measures the percentage of BTC that leaves all mining wallets at the annual moving average, has traded below zero since March 6, 2021, indicating a strong lag among miners.
Bitcoin for all foreign exchange reserves and miner status. Source: CryptoQuant
CryptoQuant analyst noted that BTC was trying to recover from falling below $ 60,000 on October 26: “The amount of bitcoins [owned by miners] is at a similar level … in May, when the price was below $ 40,000.” ‘, Add:
“You can easily see how early we are before the last bull run.”
What BTC Price Experts Say
The bitcoin price correction came from $ 67,000 to $ 58,100 after rising 60% in October. However, BTC / USD has formed a parallel downtrend (magenta) channel area, which increases the likelihood that the structure is a bull flag.
BTC / USD daily price chart with Bull Flag layout. Source: TradingView
Bullish flags are bullish continuation patterns that steer price in the direction of its previous trend after a period of downtrend. In doing so, the technical indicator looks at its growth targets with a length equal to the size of the previous uptrend, also known as the flagpole, when the price breaks above the upper trendline of the sign in large volumes.
On the subject: Is the price of bitcoin going up by analogy with 2017? Study the Market Report with ETF Expert Erik Balčunas
The Bitcoin flagpole is about $ 15,000 in length. This means that the cryptocurrency could technically rally up to $ 15,000 from the breakout point. The Fibonacci levels in the above chart can serve as a basis for returns up to $ 70,000 or higher.
However, not all traders are convinced that the current setup is bullish in the short term.
“Some might say that this is a bullish flag, and it is possible,” commented cryptocurrency trader Alex. “But the volumetric specs suggest going lower from here, probably IMO.”
Pentoshi dealer added that a break below recent lows of $ 58,000 would be bad news for bulls. He said:
“BTC 58K to Dollar What if this is big bullshit and we’re in a bull market where the bullshit is about to fall apart? In theory, the price should not go back to the lowest levels, or bitcoin is in trouble 64k to 29k 29k Backup with only two macro losses in that time. “
