As Bitcoin’s (BTC) price hovers near $40,000, blockchain analytics firm Glassnode is weighing in on whether BTC’s recent bullish movement is just a temporary fad or here to stay.
Glassnode says that Bitcoin realized over $2 billion in profits on-chain last week after multiple months of high losses.
“This suggests there is some portion of the market who spent their profitable coins, potentially taking exit liquidity.”
Glassnode also says that Bitcoin is seeing a rise in “younger” coins, which represent BTC that has sold within the past week.
“We have seen a notable spike in these younger coins out of what resembles a capitulation bottom. In a bullish scenario, this would subside (HODLing dominates) and/or price continues higher in spite of it (disbelief, absorbing the sell-side).
In a more bearish scenario, this starts an uptrend of ‘new young coin supply’ suggesting weakened conviction to hold the asset by old hands, and increasing liquid supply.”
The firm says that the historically low levels of on-chain activity are not budging despite BTC’s recent price action.
“The current entity adjusted transaction count remains down 38% from the peak set in February, currently clocking 200,000 transactions daily. Whilst on-chain activity can often follow positive price action, current levels are equivalent to the 2018-19 capitulation bottom.
That said, transaction volumes are spiking higher, up 94% from the lows of $4.7B/day, to around $9.1B/day this week. This suggests that [a] demand for on-chain block-space is likely dominated by fewer, but larger size transactions at present and is an interesting combination of indicators worth keeping an eye on.”
Bitcoin is trading at $39,425.71 at time of writing, and is up 21.7% in the past two weeks, according to CoinGecko.
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