Bitcoin becomes harder to ignore as it soars above $55K again as on-chain metrics indicate circumstances are similar to the second half or later stages of a bull market.
As news of more Bitcoin acceptance comes out of conventional finance giants Morgan Stanley and Visa, the Bitcoin market has consolidated between $53.6k and $61.5k. Morgan Stanley has made three bitcoin investment funds available to high-net-worth individuals and financial institutions. Visa has followed Mastercard’s lead in allowing bitcoin transactions.
Bitcoin whales fall flat!
Surprisingly, although small holder accumulation has continued, bigger wallet holdings (>100BTC) have remained relatively flat on net over the last three years. The graph below shows how much supply each address with 100 BTC or more has. This group now controls 62.62 percent of the BTC supply and has increased their total stake by 0.87 percent in the last year.
Writing on its “Reserve Risk” metric which is an advanced cyclical indicator employed to assess the confidence of long-term holders relative to the price of Bitcoin. The Reserve Risk oscillator is currently at 0.008, with previous periods higher than this illustrated in blue. Historically, period tops have occurred at values greater than 0.02.
“Similar to the Reserve Risk metric, these studies suggest conditions are similar to the second half or later stages of a bull market. There remains a larger relative portion of supply still held by LTHs having only spent 9% since the assumed Peak HODL point.”
Reserve Risk will rise as the price of the coin rises and/or more HOLDers spend their coins. This is a ‘capital transfer’ of BTC from long-term holders to new investors.
“Bull markets generally follow a similar ‘wealth transfer’ path over three distinct phases. We can use these fractals to estimate where we are in this cycle as a companion to the Reserve Risk metric.
Peterson speculated that Bitcoin’s price could drop as low as $25,000.
Along with Glassnode, Jiang Zhuoer and Investment manager Timothy Peterson also pointed out the recent decline in whales.
Jiang Zhuoer said that,
“There is definitely a shortage of equipment right now because, since the coronavirus epidemic, the global supply chain has been interrupted and is now in the process of gradually recovering. But the demand for chips has greatly increased, so now all industries are short of chips, whether it is Bitcoin mining or other industries, such as consumer electronics or even the automotive industry.”
Bitcoin Price Forecast
Bitcoin has been on a rally since it reached $43,000 in the last week of February and hit its ATH $61,712 on March 12. Although whales dumped their positions, Bitcoin has sustained and has been consolidating.
The volume has lessened as investors wait for Bitcoin to substantiate the escape past $60k. Nonetheless, if support at $57,000 ceases to function, Bitcoin could plunge lower to experiment with $55,000 again.
The gap between $60k and $56k has elevated the attention of buyers and if tested, Bitcoin could also make a comeback upwards. The major support stays at $55k.
Bitcoin being the biggest cryptocurrency in the world, also attracts Big whales and institutional investors. Hence sudden pumping and dumping can affect the volatility, trends and eventually the prices of the Bitcoin.