Green light for Bitcoin rally: BTC price cements new ground
The bitcoin engine is running hot again. After a short, but all the more crisp selling wave, various on-chain data give the green light for the next rally again.
With a daily gain of 1.5 percent, the bitcoin price continues the march of the past trading days. The losses since the record high at the end of February have gradually been recouped. For the week, the cryptocurrency is up 12.9 per cent and is trading at 54,700 US dollars as of the editorial deadline.
The upswing of the market-dominating cryptocurrency is also rubbing off on the Bitcoin Loophole altcoins. With the exception of Cardano (ADA), the top 10 largest cryptocurrencies have posted price gains of between 3.9 (Polkadot) and 24 per cent (Uniswap) in a 7-day comparison. Thus, the total market capitalisation of currently 1.74 trillion US dollars is only 40 billion US dollars below the record high of 22 February. However, looking at the crypto bandwagon’s on-chain data, this gap should close quickly.
Miners curb Bitcoin sales
While the bitcoin price was still under the wheels in the course of profit-taking and panic selling shortly after the all-time high, according to the latest week-on-chain report from crypto data portal Glassnode, various indicators are pointing to an end to the mini-consolidation. A major factor in the correction phase was miners who „made huge CAPEX and OPEX investments in ASIC hardware and equipment“. In order to cover these operating costs, they had to constantly sell large amounts of bitcoin. However, this selling pressure seems to be gradually diminishing. According to the report, „the rate of miner sales is declining“. Thus, „it appears that miners are returning to neutral or accumulation mode“.
Another indication of an upward trend is the Bitcoin distribution of long-term investors who hold their coins for a period of at least 155 days. While a broad selling trend was still evident between October 2020 and early January, „this distribution behaviour has slowed down“. Long-term investors are „still distributing around 44,500 BTC per day“. However, the slowdown proves „that long-term investors, similar to mining operations, are taking profits but certainly not rushing to exit“. Thus, „the trend is shifting towards a decline in spending“.