For the first time in a bullish Bitcoin (BTC) market, not only long-term investors, but also short-term speculators, who tend to increase daily selling pressure at the end of the market cycle, are becoming increasingly confident of price hikes as they do so. Bitcoin contract.
This only exacerbates the already existing supply shock. If demand remains high, this is a recipe for a new BTC price hike.
Bitcoin selling activity decreased again
Each bull market for bitcoin usually coincides with an increase in the number of short-term speculators entering the market hoping to make quick profits, while long-term speculators have begun to add selling pressure in the second half of the market cycle to make a profit.
One of the best indicators in the series to see the development of this trend in every cycle is called HODL waves. Thus, the length at which each BTC address stores bitcoins before they are sold in the market is grouped into segments of the futures contract, which are then visualized in various feeds.
Bitcoin: HODL Waves. Source: Glassnode
For example, a person who kept Bitcoin for five months would fall into a 3-6 meter bucket, which is a bright orange stripe. If a person decides to sell, he drops from the bucket and a dark red stripe appears in the 24 hour bucket.
This means that the redder the colors on the HODL wave chart of the corresponding date, the more short-term bitcoin will be trading. This activity is roughly the lowest during the bear market and highest during the beef market, while short-term activity tends to peak during the peak of the beef market.
Reversing the value realized in HODL waves is critical.
Since the price of Bitcoins fluctuates greatly during market cycles, and HODL waves only represent the absolute number of bitcoins transferred, this chart does not take into account the total value that the bitcoin seller made on the corresponding day.
Since it is more and more profitable for traders to make money as prices rise, HODL waves can be weighted at the strike rate, which is the price at which each Bitcoin is bought / sold on average.
This mod allows you to visualize value-based profit on a daily basis using color-coded boxes with value adjustments.
Usually bitcoin cycle peaks form around the peak of activity in the short term.
When HODL waves are weighted against the realized price, perceived HODL waves are output, which is a concept pioneered by the analyst on the Typerbole Series. This mod shows that 1-1 meter bucket trays match every stop-over in the beef market so far.
Bitcoin: Executed Cap HODL Waves. Source: Glassnode
Not only does this indicator indicate that current selling activity has not yet reached the typical peak of a bull market, but it also shows that this trend, for the first time in the history of a bullish Bitcoin market, is declining as prices continue to rise.
Bitcoin: HODL Waves 1d-1m hood is implemented. Source: Glassnode
This is an unusual trend in the beef market. Assuming that the price has not yet peaked, this indicates that profit seekers, whether in the short or long term, are starting to cling to bitcoin again and expecting higher prices, further shrinking the supply of bitcoin on the exchanges. …
Bitcoin sales activity in relation to the holding period is rather low
Raphael Schulze-Kraft, CTN at Glassnode, takes a similar view when looking at long-term assets with Coin Days Destroyed, an indicator that shows the total number of retention days that have been “destroyed” by their bitcoin selling holders.
Based on this indicator’s 3-month moving average, the devastation has returned to the level last seen in the summer of 2019, at times when the price had already peaked.
If the price is close to the highest market in the beef market, a much higher reading of the index is expected as long-term holders will see tangible gains, which is not the case at this time.
Bitcoin usage behavior in relation to market capitalization is low
If you continue this concept of Coin Days Destroyed and look at it in terms of average destroyed value in terms of market capitalization, you will arrive at what is called an inactive flow. This is a concept invented by analyst and trader David Bell.