Since recovering from the March lows, bitcoin has been struggling to make its way upwards. We tested $10,000 — the important psychological level numerous times only to fail and get stuck in a range.
Bitcoin refuses to attain five-digit value despite the central bank pumping money into the market. This time, investors are putting all the cash either into their bank deposits or pumping the stock prices, even of the bankrupted companies.
However, the bitcoin market is busy hodling; as such, Rafael Schultze-Kraft, CTO at crypto data firm Glassnode, is “extremely long-term bullish” on the world’s leading digital currency who advises not to get distracted by short-term price action and to look at the bigger picture.
Schultze-Kraft also shared a series of charts that depict this increased hodling behavior and investor confidence, starting with the record amount of bitcoin supply, 61% that hasn't moved in over a year. This all-time high is a clear indication that investors are anticipating higher value in the future.
Also, 44% of BTC supply hasn’t moved in over two years, which is again approaching ATH, and almost 30% supply hasn’t moved in more than three years.
The average Coin Days Destroyed has been decreasing since the 2017 bull run and is currently at its lowest levels since 2016 — the lower the CDD, the more the long-term hodlers.
In a similar manner, Bitcoin Binary Coin Days destroyed, which are the number of days per year in which coins were destroyed compared to the historic average, has never been this low as in 2020.
Another factor showing high confidence of long-term bitcoin investors is the Reserve Risk, which at the current level indicates an attractive risk/reward ratio to invest.
Long-term holder MVRV is also “looking strong” which usually drops below 1 after prolonged bear markets. MVRV long/short diff. crossovers indicate moments when average short-term and long-term traders move into profit territory. It tends to be a psychological barrier for many traders, which often kick FOMO and greed, as per Santiment.
ALWAYS when this #Bitcoin signal flashed, we started a MASSIVE bull run!
And guess what: today it flashed again! pic.twitter.com/dDdu0WBEMW
— MMCrypto (@MMcrypto) June 26, 2020
Liveliness indicator that increases as long-term holders liquidate positions and decreases as long-term investors accumulate to HODL has been on a downward trend since 2019.
In fact, the number of hodled and lost bitcoins increased by 8% since the beginning of 2019 and is currently at over 7.3 million — 40% of bitcoin’s circulating supply.
HODLers are heavily accumulating this year, with only 16 days being the ones in which BTC Hodler Net Position Change has been negative.
Amidst this, the average age of bitcoins moved on-chain is constantly decreasing since 2018, as per the Median Spent Output Lifespan (MSOL) indicator.
The amount of bitcoin transferred on-chain meanwhile has stagnated since 2016 despite the growth of the network which Schultze-Kraft says “is a clear indication of Bitcoin's SoV narrative,” because investors aren’t willing to spend their BTC.
Adding to this narrative is bitcoin velocity, which measures how quickly units are circulating in the network. It has dropped to the lowest point in ten years.
As we have reported, bitcoin balance on exchange has been declining since March, which in part could be investors’ choosing to take custody of their own BTC.
So, overall, the market is long-term bullish and stacking sats waiting for the next big bull run.