Long-term financiers with short-term observers are confident of Bitcoin to improve significantly in the upcoming time since the selling activity of the cryptocurrency investors has slowed down. Because of this, the presently existing supply shock will grow, and if the demand remains robust as it is, it will only assist the price of Bitcoin to increase further.
Selling of Bitcoin slowing down again
Whenever the Bitcoin bull market approaches, many short-term observers get on the bandwagon to gain a quick and easy profit, while the long-term investors add sell pressure on the later half so they can recoup their profits.
Considered among the best mode to indicate the trend to pan out is known as HODL waves. In HODL Waves, the time a Bitcoin address hold BTC before being sold is compiled in buckets indicated by various colors.
The light orange represents three months to six months hold time, whereas if those Bitcoins are, traded they are, shifted to a 24-hour bucket presented by dark red. In layman’s terms, the redder the represented in the HODL waves, the additional short-term trading is going on. Overall, short-term trading is usually minimum in a bearish market and its peak at a bullish market.
Taking a look at the realized value is crucial
HODL wave does not identify the total amount of capital made in a day since the value of Bitcoin is never stationary, and the transactions are never at a similar price as before.
As the price of Bitcoin moves higher and higher, it becomes more profitable for holders. HODL can be tweaked by the realized price so it can represent the value-based profit-making of a day.
The cryptocurrency peak usually forms when there is much short-term movement
Once the HODL is tweaked to the realized price, it will show one-week to one-month peaks corresponding with every bull market peak so far. This not only points towards the lack of selling activity which is routinely found in this time of a bull market. But also specifies for the 1st time in the market, selling activity is slowing down whilst the price is moving up. This proves how, long-term or short-term, all investors are looking to gain more profit by slowing down the selling of Bitcoin, further incrementing to the cryptocurrency’s supply squeeze.
The selling activity of Bitcoin compared to the general holding time is remarkably low
CTO of Glassnode is employing a similar approach by observing at Coin Days Destroyed that represents long-term holders. This indicator represents the sum of holding days by holders trading their cryptocurrency. According to the three months mean, destruction has reduced to the point last witnessed after the peak of 2019.
Bitcoin spending habits compare to market capitalization is very low
Dormany flow explains the moving mean of Bitcoin holder’s expenditure habits yearly. It is, centered upon the value held that is, destroyed relative to the generally increased value. The indicator tells us the mean of the year spending habits of Bitcoin has been healthy and relatively below the previous bull market trading.
This is the cryptocurrency’s catalyst
The recent supply squeeze will cause a favorable effect on Bitcoin price that will ultimately make it even higher. Nevertheless, this does not promise anything, but as history teaches us, the leading institutions and influential individual demand can only propel the current price of Bitcoin even higher since it has remained the primary operator on the purchasing side.