On-chain data shows that Bitcoin is experiencing a strong recovery, both in terms of hashing power and fundamentals. Is the market getting ready for an explosive second half of 2021?
Let’s dig in.
BTC hash rate recovers as Miners Leave China
The Bitcoin hash rate is on a steady incline as miners fleeing from China turn their rigs back on. Since the June low around 84 exahashes per second (EH/s), the hash rate has ticked 50% higher, reinforcing the fact that Bitcoin is ultimately agnostic of hostile country regimes.
Check out the full article here!
BTC Balance on exchanges trends lower
On-chain data is useful for contextualising price-action, which in turn provides the groundwork for price expectations, the depth of potential retracements, and overall market health.
As of August 30th, bitcoin balance on exchanges is forming new lows.
The data implies that investors and traders are taking liquidity away from the market and into cold storage, where that bitcoin is less likely to be spent. In other words, more bitcoin off exchanges means less selling pressure.
If the trend continues, this is quite bullish and helps to place a ‘cap’ on potential downside scenarios.
USDT (Tether) Balance on exchange ticks higher
At the same time, USDT is ticking higher. Specifically, the 23rd of August saw Tether balances on exchanges spike from $4.8 billion to $6.7 billion the following day.
One explanation could be that investors cashed out their positions at the $50,000 mark into the stablecoin. While this is likely part of the explanation, USDT is not only sitting on exchanges, but actively increasing.
The above chart shows the net position change of USDT on all exchanges, averaging close to $2 billion in net inflows per day.
This is dry gunpowder.
Long term investors double down
Finally, Bitcoin holders are also doubling down.
When Bitcoin holder net position change is negative, long-term investors are said to be selling. But when the net position change turns positive, long-term investors are acquiring bitcoin.
As you may have noticed, these findings appear to run contrary to the last newsletter, where we discussed the prospect of a self-off at the start of a new month brought about by weakness in traditional markets.
Since then, BTC/USD fell back to $46,300, only to be pushed back to $49,600 days later before cooling off again. While a period of consolidation may still be in play, the $46,000 line still stands as support at the time of writing.
Price-action and on-chain data are also beginning to resemble prior periods of accumulation where the market gears up for the next leg higher. We observed relatively choppy price-action in August — September 2020, during which time market participants were both accumulating Bitcoin and funnelling stablecoins onto exchanges, ready to inject capital into the market.
As such, this is not so much a change in bias as it is a recognition that on-chain data does not suggest that the bull run is over. On the contrary, it shows investor optimism and market-readiness for bitcoin and cryptocurrencies.
From a technical perspective, $46,000 remains the line in the sand for short-term gains, with $49,000 offering low time frame resistance. If captured, the last selling block which characterised the pivotal moment when the market turned in May will be open for business. For all intents and purposes, $57,200 is the last resistance level before new all time highs. When this order block is eventually captured, the first take-profit area would be the 1.618 fib extension level, which rests at $ 88,000. I expect this number to be the minimum price target for the year’s end.
The mid-term bullish outlook becomes shaky if the key January support at $42,100 and the psychological $40,000 level fail to buttress prices in the event of a sell-off.
Either way, the on-chain evidence bolsters arguments for continuation at the time of writing. This may change in the future, which is why monitoring the markets and remaining up to date is essential.
If you think others might benefit from this analysis, share it.
Bulls lead the way.
Catch you later.
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Best regards,
Christopher Attard
Founder of Chris on Crypto
Contributor to www.cityam.com
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On-chain knowledge reveals that Bitcoin is experiencing a powerful restoration, each by way of hashing energy and fundamentals. Is the market preparing for an explosive second half of 2021?
Let’s dig in.
BTC hash fee recovers as Miners Depart China
The Bitcoin hash fee is on a gentle incline as miners fleeing from China flip their rigs again on. Because the June low round 84 exahashes per second (EH/s), the hash fee has ticked 50% larger, reinforcing the truth that Bitcoin is in the end agnostic of hostile nation regimes.
Try the full article right here!
BTC Stability on exchanges tendencies decrease
On-chain knowledge is helpful for contextualising price-action, which in flip gives the groundwork for worth expectations, the depth of potential retracements, and total market well being.
As of August thirtieth, bitcoin stability on exchanges is forming new lows.
The information implies that buyers and merchants are taking liquidity away from the market and into chilly storage, the place that bitcoin is much less more likely to be spent. In different phrases, extra bitcoin off exchanges means much less promoting strain.
If the pattern continues, that is fairly bullish and helps to position a ‘cap’ on potential draw back eventualities.
USDT (Tether) Stability on trade ticks larger
On the similar time, USDT is ticking larger. Particularly, the twenty third of August noticed Tether balances on exchanges spike from $4.8 billion to $6.7 billion the next day.
One rationalization might be that buyers cashed out their positions on the $50,000 mark into the stablecoin. Whereas that is doubtless a part of the reason, USDT will not be solely sitting on exchanges, however actively rising.
The above chart reveals the online place change of USDT on all exchanges, averaging near $2 billion in web inflows per day.
That is dry gunpowder.
Long run buyers double down
Lastly, Bitcoin holders are additionally doubling down.
When Bitcoin holder web place change is detrimental, long-term buyers are stated to be promoting. However when the online place change turns constructive, long-term buyers are buying bitcoin.
As you’ll have seen, these findings seem to run opposite to the final e-newsletter, the place we mentioned the prospect of a self-off firstly of a brand new month led to by weak spot in conventional markets.
Since then, BTC/USD fell again to $46,300, solely to be pushed again to $49,600 days later earlier than cooling off once more. Whereas a interval of consolidation should still be in play, the $46,000 line nonetheless stands as assist on the time of writing.
Value-action and on-chain knowledge are additionally starting to resemble prior durations of accumulation the place the market gears up for the subsequent leg larger. We noticed comparatively uneven price-action in August — September 2020, throughout which era market individuals had been each accumulating Bitcoin and funnelling stablecoins onto exchanges, able to inject capital into the market.
As such, this isn’t a lot a change in bias as it’s a recognition that on-chain knowledge doesn’t recommend that the bull run is over. Quite the opposite, it reveals investor optimism and market-readiness for bitcoin and cryptocurrencies.
From a technical perspective, $46,000 stays the road within the sand for short-term beneficial properties, with $49,000 providing low time-frame resistance. If captured, the final promoting block which characterised the pivotal second when the market turned in Might shall be open for enterprise. For all intents and functions, $57,200 is the final resistance stage earlier than new all time highs. When this order block is ultimately captured, the primary take-profit space could be the 1.618 fib extension stage, which rests at $ 88,000. I count on this quantity to be the minimal worth goal for the yr’s finish.
The mid-term bullish outlook turns into shaky if the important thing January assist at $42,100 and the psychological $40,000 stage fail to buttress costs within the occasion of a sell-off.
Both manner, the on-chain proof bolsters arguments for continuation on the time of writing. This may occasionally change sooner or later, which is why monitoring the markets and remaining updated is crucial.
In case you suppose others may profit from this evaluation, share it.
Bulls prepared the ground.
Catch you later.
Be part of the Telegram channel for dwell updates & setups!
Comply with me on Twitter & Gab and my social portals beneath.
You can even assist me in Bitcoin!
BTC handle: 3EydsEYpjHn68axKnCUqBB7EbqcxrEjamr
Greatest regards,
Christopher Attard
Founding father of Chris on Crypto
Contributor to www.cityam.com
Join instantly on: Telegram
