On-Chain Fundamentals Point To High Investor Confidence in Bitcoin Despite Price Dip


  • On-chain bitcoin fundamentals paint an positive outlook for the price as it finds gains back up over $9,000
  • BTC has “more room to grow imminently”

Yesterday, Bitcoin climbed back above $9,000 and continues to hold above this level. After falling to nearly $8,400 last week, bitcoin is now exhibiting signs of rebounding in the past 24 hours. However, the stock-to-flow model price puts BTC’s value at about $8,646.

But it’s not just the price that is showing signs of recovering but on-chain fundamentals as well. When it comes to the on-chain US Dollar volume average in seven days period, seems to have gone lower following the dip in price earlier in the week, absolute values were on course, with the volumes seen a month or so ago. Crypto data provider Glassnode states,

“While coronavirus fears threatened to push prices below this support level, this threat appears to have passed for the time being as markets recover both in and out of crypto.”

The Reserve Risk of bitcoin is currently at low levels, making for an appealing risk/reward ratio for investing in bitcoin. This standard of measurement is used to assess the confidence of long-term holders relative to price and the numbers show, “high investor confidence in BTC at current price levels.” Combined, the on-chain fundamental suggests BTC has “more room to grow imminently.”

Bitcoin- Reserve Risk, Source: Glassnode

Reserve Risk is calculated by dividing the HODL Bank, delayed spending as a result of HODLing, by the current price. When belief is high and the price is low, there is an attractive risk/reward to invest in BTC which is currently the case.

Another indicator shows “strong investor confidence.” The Average Spent Output Lifespan (ASOL) metric also represents long-term investor stamina by showing when long-term HODlers leave the market.

Bitcoin- ASOL (7d Moving Average), Source: Glassnode

Historically, an increase in this metric came all at once to see big sell-offs as investors sold their positions. Over the past couple of days, there has been a “significant spike” in ASOL but this has been due to an exchange aggregating BTC dust from Omni transactions.

Filtering this out presents ASOL levels at low meaning long-term investors are not backing out of their positions. This suggests investor confidence in the digital asset remains high despite bitcoin's recent dip.

Bitcoin (BTC) Live Price

1 BTC/USD =$37,256.3117 change ~ -2.65%

Coin Market Cap

$692.67 Billion

24 Hour Volume

$22.49 Billion

24 Hour VWAP

$36.55 K

24 Hour Change

$-986.98

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