This week started on a red note, with the price of bitcoin falling below $8,700. Today, we made our way back above $9,000 only to dropdown again. Crypto Fear and Greed Index remains largely in the neutral or fear category.
Currently BTC/USD is trading around $8,850 while managing the real volume of $1.4 billion.
Meanwhile, Bitcoin sees its largest prolonged withdrawal of funds from exchanges, with more than 310,000 BTC moved out of crypto exchanges since Black Thursday.
— Arcane Research (@ArcaneResearch) May 26, 2020
Among all the crypto exchanges, Bitfinex recorded the largest outflow of 126,845 BTC followed by Huobi at 95,496 BTC and BitMEX at 95,438 BTC.
“So bullish,” said analyst Cole Garner about this trend. By keeping control of their own keys, bitcoin investors are tilting towards being long-term holders instead of looking for an opportunity to dump their coins.
HODLing and Accumulating
Interestingly, the 1 year HODL factor of bitcoin has also surpassed 50% for the first time. The fact that half of Bitcoin’s active supply hasn't moved in over a year means an increasing long-term holder base and investors supporting the store of value narrative.
While retail is busy with the security of their coins and keeping a long-term position, bitcoin whales are back to accumulating.
As per the data provided by Santiment, those addresses holding 100 or more bitcoin have added yet another 12,000 BTC to their bags, worth over $108 million since Bitcoin’s drop below $9500 a week back on May 20th.
“Since the start of the year, these addresses have shown a propensity to accumulate into dips and offload their bags slightly before short-term tops occur,” noted Santiment.
On-chain fundamentals threaten to undo the progress
Despite the accumulation, the Glassnode Compass that outlines the general regime in which bitcoin is currently located based on its price behavior and on-chain fundamentals, it is sliding closer to the bearish regime this week.
While the positive price action kept the market sentiments lifted, the overall decrease in on-chain fundamentals “threatens to undo this progress in the coming weeks.”
Also, the fact that bitcoin is no longer testing the important $10,000 level, we may see a “regression back into bearish territory,” that is if on-chain activity and overall market health continue to decline.
However, whether the halving is priced in, is still not absolutely confirmed, as per Glassnode as, during the previous halving, it took several months before bitcoin turned bullish and more than a year before the prices started seeing an increase by order of magnitude.