Bitcoin’s BTC/USD Exchange Rate Bottom Is In, The Worst Is Behind Us: Reports Delphi Digital
Bitcoin Bottom Is In & The Worst Is Behind Us: Reports Delphi Digital
Delphi Digital has returned with its another report stating “we continue to believe the bottom is in.”
Recalling its report from January, this year, the research firm says the market cycle of Bitcoin is right on its track. In its previous report, Delhi Digital had called out the bottom of the bear market in Q1 that was further supported by Adamant Capital’s report.
In its report on unspent transaction output (UTXO), it evaluates UTXO as a signal of market buying and selling which by extension further determines the future trajectory of the market.
The unspent output from bitcoin transactions (UTXO) are processed continuously and are responsible for beginning and ending each transaction. This is a technical way of describing the last time bitcoin was moved.
According to the report, UTXO age distribution over time tells about the buying and selling patterns allowing to forecast where the market is in respect with prior cycles and what to expect when moving forward.
“An important contributing factor to our forecast was our analysis of UTXO age trends & how they’ve progressed relative to previous cycles. The 1Y+ holder rate was 53.9% at BTCs low this past Dec, which is in line w/ the 1Y+ rate of 53.5% during the bottom of the previous cycle. As of April 23rd, 61.1% of bitcoin has not moved in over a year. This 1 year+ holder rate was 52% at the end of November, 57% at the end of January, and 60.3% a week into March.”
Long-Term Holders Stay Strong While Accumulation Continues
The report clearly states that “Bitcoin has bottomed.” Going on the assumption that the bottom occurred in December when BTC was at around $3,200, at that time 1 year + holder rate was 53.9% which falls in line with the bottom in previous cycle in January 2015 at 53.5%.
This means fewer long term holder are sellers. Per the report, long term holding is inversely proportional to the price movement.
“Minimal selling coming from long-term holders throughout the consolidation period over the past few months. In fact, we've actually began to see a very slight uptick among long term holders, which is consistent with the trend after the previous cycle bottomed.”
Additionally, the 1-2 years and 5+ years UTXOs are growing, a trend that shows younger ones are being held onto for longer periods and moving to older lifespans. The firm sees this as a strong sign of accumulation.
The report states, the percent of 1+ year UTXO are currently in line with the peaks of the previous cycle. Though it has slowed down, implying that we are out of the fast growth period, it coincides with the post-bottom environment from the previous cycle as well.
Per Delphi Digital report, the worst is behind us as it cites a number of optimistic measures such as Bitcoin outperforming other investments including gold, S&P 500, and oil.
The report wraps up by claiming that Bitcoin is gaining momentum as Bitcoin recently climbed to $5,600 when the 50-day moving average crosses above 200-day moving average known as “golden cross.” Though renowned as an extremely bullish signal, it does have its exception in October 2015 that led to “sizable declines.”
Delphi Digital believes the golden cross is a good sign and is comfortable trading above its 200-week MA, “BTC would have to drop 32% from its current level ($5,225) to retest its 200-week MA and nearly 40% to retest its December low.”
The report concludes that price is expected to appreciate if the sentiment score remains at current levels and if it tumbles, we could see price revert a bit. But overall, traders are positive.