On-Chain Bitcoin [BTC] Trends Suggest That Whales Are On A Stacking Spree
Data suggests that Bitcoin [BTC] hodlers are exhibiting strong hands as the post halving bull market continues to rage. Both institutional and retail investment, on-chain, is at an ATH, looking to ‘stack sats.’
Store of Value
The velocity of ‘money’ is a measurement of the rate of exchange of the ‘currency’ in the market. High velocity is positive for the currency as it represents greater demand and liquidity for that ‘money.’
Nevertheless, in the case of Bitcoin lower velocity represents stronger hands. The chart shows a higher velocity during the prior two bull markets which is yet to be seen in this bull trend. Jamesson Lopp tweeted,
Velocity of total supply and of one-year active supply (i.e. the supply that has been transacted at least once within the last year) of bitcoin has reached lows not seen since 2011. Folks don’t want to part with their bitcoin.
Bitcoin Supply Velocity (Source: Tweet)
The number of addresses holding more than 1 and 1000 BTC has also reached a new All-Time High (ATH). This is positive from a both retail and institutional perspective. Prominent trader, Filbfilb (alias) tweeted,
The number of addresses with >1 BTC (retail) and the number with >1000 BTC (HNWI / Institutions) has hit all-time highs, at a time when the number of BTC being held on-exchange is reaching new local lows and the inflation rate has recently been halved.
No. Bitcoin Addresses above 1000 BTC (Source: Tweet)
Notably, the time after the asset prices crash during mid-march due to coronavirus crisis saw a considerable increase in the number of addresses above 1000 BTC. This suggests positive buying action by “whales.”
The first entities to be affected by the halving are miners as their rewards are reduced in half. However, the miners are continually adding to the network, strengthening the long-term value proposition. On the supply side, the total hash rate and difficulty are at new highs. There was a brief drop in hash rates post halving, from which the network has now fully recovered.
Bitcoin [BTC] Total Network Difficulty (Source)
The total hash-rate is at par with the pre-halving levels after reaching a new ATH last week on 16th August. Despite the drop in rewards by 50%, the increasing hash-rate comes with a huge capital investment which builds confidence around the future of the technology.
Do you think that Bitcoin [BTC] is coiling up for a move higher or correction is underway? Please share your views with us.