Bitcoin has likely entered the bear market’s second half, according to Glassnode analysts.
#Bitcoin has now broken out of the consolidation range it has been trading in for over 2-months.
In this edition, we analyse the underlying fundamental strength which supports this rally, and assess whether #Bitcoin is on the road to recovery👇https://t.co/adPAGSYJ1t
— glassnode (@glassnode) March 28, 2022
Last week, the price of the leading cryptocurrency broke through the upper boundary of a three-month range at $47,000. Active accumulation of coins in the $35,000-$42,000 range and the lack of significant spending of bitcoins acquired in Q1 2021 outweighed selling pressure.
The share of BTC older than one year over the past eight months rose by 9.4% to near a record 62.9%. Holders of these coins did not dispose of the asset despite two corrections of more than 50% over the past year. The pace of this metric’s growth is comparable to the market recovery in 2018-2019.
Analysts warned that the process of forming a bottom and investor capitulation in a bear market is often protracted and painful, and urged not to rush to declare the bear market over.
Part of this stance reflects periods when, during rallies within a downtrend, hodler selling can spike.
Experts pointed to an uptick in selling of bitcoins aged over a year to 7,000–10,000 BTC in the last 30 days. This can be explained as evidence of sufficient demand absorbing supply and as rising hodler uncertainty about reducing risk amid the current conditions.
Distribution of UTXO by price levels, broken down by short- and long-term investors shows that the latter bought a larger share of coins above $45,000 and did not unwind positions amid growing unrealized losses.
Meanwhile, speculators accumulated coins in the $38,000 to $45,000 range, which is constructive given the current uncertainty.
Experts warned that in the past bear markets were preceded by episodes of large investor capitulations. On the profit/loss distribution chart for coins sent to exchange wallets over the last 12 months, there were two such episodes, though on a much smaller scale. Taken together with two 50% drawdowns over the period, this may reflect increasing investor confidence in Bitcoin.
Earlier, the head of DeVere Group predicted a rise in Bitcoin to $50,000 during March.
Earlier, Elon Musk stated that he was hodling cryptocurrencies in anticipation of rising inflation.
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