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Hey onchainers,
Welcome back to IntoTheBlock’s newsletter. We have created a different type of newsletter for crypto fans that is not about news, but about data and analytics. Every week, we deliver valuable data insights about the crypto market.
This Week Analysis: The current state of Bitcoin
On March 25, with the record-breaking $6.1 billion options expiring today, Biitcoin experienced a sell-off that dropped the price below $50,500. There's a lot of especulation happening around the new contracts set to expire on April 30, with investors placing their bets on a strike price of $80k.
Bitcoin price is currently sitting at $53,271.95 and investors seem to be uncertain about its next potential move. By analyzing the profitability of traders near the current price of BTC, we can understand the circumstances and price ranges expected to act as support and resistance now.
At the time of writing, Bitcoin bulls and bears are fighting to claim the highly-contested price around $53,000. The IOMAP indicates a large cluster of addresses (677k) and volume (440.097k BTC) had been bought slightly below $53,270. This price range, which already saw high levels of trading activity, points to the likelihood of investors looking to buy back near this range and create support before price lowers further. If this range is broken, there’s a similar area with a concentration of buyers between $48,503 and $50,132. Here, approximately 639.2k addresses had previously purchased roughly 348k BTC.
But despite the recent downward price action, on-chain indicators are looking as strong as before. At IntoTheBlock, we classify an address with a holding time of over one year as a hodler. As can be seen in the graph below, the number of BTC hodlers has increased by over 2.84 million within the last twelve months.
Our Hodlers indicator has continuously shown an almost linear growth every month, despite Bitcon recent price action, it is now at about 21.55m addresses, an All-Time-High for this metric, and it represents 57.96% of the total BTC holders.
This hodl trend can also be represented by the number of old coins that have been moved over the past six months. IntoTheBlock's UTXO Age indicator is helpful to grasp the volume of transaction activity occurring relative to the blockchain’s historical transactions.
The UTXO Age metric is helpful to understand long-term market cycles. When long-term UTXOs (marked in green to blue waves) are decreasing it points to older coins will be sold for profit, suggesting an end to the bull cycle. But that doesn't seem to be the case, as investors are holding to their BTC assets.
With a current circulating supply of 18.664 million, at least 9.49m BTC hasn't been moved in over 12 months, and taking into consideration that a large portion is reported to be lost or stolen, it is clear that investors see that this bull-trend still have a long way up, increasing the supply scarcity of the asset.
As the UTXO Age indicator suggests that short-term unspent transactions outputs are moving the market, denotes a high amount of transaction volume taking place and new holders entering coming in.
The Transactions Volume indicator measures the aggregate volume of transactions recorded on-chain. This version of the indicator tracks the volume in crypto terms (i.e. USD instead BTC).
As can be seen in the graph above, the transaction volume has been on a consistent uptrend throughout the last year. This growth in volume can be interpreted as a sign of confidence in the current break-out, but the question remains if this short term traders are accumulating or rushing to exit their positions.
Overall, despite the recent price action, on-chain data suggest that Bitcoin remains strong. With increasing adoption from institutional investors and analyzing the current market cycle, looks like the bull-run is not over.
IntoTheBlock Webinars
The IntoTheBlock's webinar series is a curated monthly program created to provide a unique view of the crypto analytics space. Each month we choose a different topic and analyze it using ITB data, providing insightful and unique perspectives on the market.
Last Week Session
A Journey into Yield Generating Strategies in DeFi
We presented some of the new world of DeFi quant yield-generating strategies. We also discussed key building blocks required to implement intelligent DeFi quant strategies in an institutional-grade manner.
Here are a few notes of the session:
DeFi offers a new playground for quant yield generating strategies
Building institutional-grade DeFi yield generating strategies requires infrastructure
Risk management should be a key building block of institutional-grade DeFi yield generating strategies
Watch the recording of the webinarhere Watch the slides of the webinarhere
Upcoming Webinar: April 7, 12pm EST
A Data-Centric Perspective of the Recent Crypto-Bull Run
(Limited to 100 seats)
Crypto is known for its volatile price cycles, in which prices can appreciate over 20x and then retrace as much as 80%. Behind these cycles there is a vast amount of data that can be useful to understand the underlying growth and progress behind the noise.
In this webinar we’ll dive into key metrics highlighting the broader trend and adoption of crypto-assets. We’ll compare the current cycle vs previous ones, discuss the evolution of crypto and what may come next.
