Against the backdrop of the largest wave of profit-taking in Bitcoin since May 2022, most coins have remained relatively inactive. The majority of speculators are prepared to hold them for longer periods, according to Glassnode analysts.
After several weeks of out-performance by #Bitcoin prices, the market is taking a breather.
In this report, we shall gauge investor confidence using a suite of on-chain tools, ranging from exchange flows to profit-taking and coin-holding times.https://t.co/gr0R5tekCF
— glassnode (@glassnode) March 27, 2023
Against the backdrop of the rally in the previous weeks, investors intensified the inflow of Bitcoin to centralized exchange accounts to 4,180 BTC (14D-EMA) — the highest since collapse of the Terra ecosystem in May 2022. The trend confirmed profit-taking.
Earlier instances with similar or larger net inflows during the last cycle were linked to market corrections, the analysts recalled.
Of the 31 000 BTC sent to exchanges last week, 92.5% belonged to speculators (65% of the coins associated with them were in profit), and 7.5% — hodlers (80%).
The volume of daily realized profit reached $320 million. The last time such a high figure was observed was shortly before the Terra collapse. The magnitude remains below bull-market levels. The pace of realized losses has been waning since July 2022.
This combination confirms previous observations about the formation of a transitional market structure after the bear phase, the specialists emphasised.
The Liveliness indicator ( Liveliness (the dynamism of hodlers’ behaviour)) has maintained a downward trajectory, indicating a tendency to hold Bitcoin and confidence in the asset.
The metric Average Coin Dormancy applied to short-term investors showed a doubling of the ‘average age’ of spent coins from 10 days at the time of the FTX crash to the current 21 days.
“Speculators are willing to wait out longer periods, signaling their confidence in the prevailing market trend,” — the analysts concluded.
In March 2023, the founder and CEO of the analytics firm Messari, Ryan Selkis, predicted Bitcoin would rise to $100 000 within 12 months. He described the leading cryptocurrency as a safe investment in the face of problems in the US economy.
A similar view was voiced by many industry experts, according to a CNBC poll.