Bitcoin Bitcoin holders are avoiding leverage in the latest rally, here’s why – Low demand for leverage gives insights into the current Bitcoin investor psychology.- BTC enjoys demand in the derivatives market courtesy of a strong recovery in open interest.Glassnode alerts just revealed that the amount of HODLed or lost Bitcoin is now at a 5-year high.This reflects the positive price action that the cryptocurrency has delivered in the last few weeks.This means BTC investors have been accumulating but despite this, leverage has been on a decline.
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This is why it is interesting to see lower demand for leverage despite heavy HODLing.📈 #Bitcoin $BTC Amount of HODLed or Lost Coins just reached a 5-year high of 7,562,069.403 BTC Previous 5-year high of 7,561,969.550 BTC was observed on 04 November 2022 View metric:https://t.co/dJK8rxBVD3 pic.twitter.com/9PLAK2TH8i — glassnode alerts (@glassnodealerts) January 22, 2023 Bitcoin’s estimated leverage ratio has been declining since the end of December 2022.The last time it was as low as it currently is was in May 22.But what does this really mean for the market? It suggests that more BTC investors are opening their eyes to the risks associated with leverage.Especially considering the highly volatile and uncertain nature of the crypto market.This might actually be a good thing for BTC holders because it means there is not a heavy risk of leverage-induced liquidation.The liquidation of heavily leveraged trades is among the reasons why many have lost their BTC holdings in the past.Bitcoin bulls are still dominant but for how long? Bitcoin is still experiencing healthy demand, especially from the derivatives segment despite the lower demand for leverage.
Open interest bottomed out just after mid-December after which a bullish pivot was observed.This might be a sign that investors in the segment, especially institutional buyers have also been accumulating.The BTC bulls are starting to experience an increase in friction despite this demand from the derivatives market.A good example of this is the pivot we observed on the Bitcoin exchange reserve metric which suggests that there might be some incoming sell pressure.
Unsurprisingly, exchange inflows outweighed exchange outflows at press time.How many are 1,10,100 BTCs worth today? Exchange flows have notably decreased in the last few days, which suggests that buying pressure might be losing its momentum.This means profit-taking may pave the way for an influx of sell pressure, especially after the rally in the last three weeks.What to expect? Now that the bulls are slowing down, the expectations of some retracement are notably higher.
However, the low leverage may indicate that many BTC holders have a long-term bias, thus the low focus on leveraged trades.
A potential implication is that we may see a weak retracement.- Bitcoin hashrate is at an all-time high, and competition for block rewards is fierce.- Miners’ revenue has declined, and the selling pressure may increase anytime soon.
Bitcoin’s hashrate reached a new all-time high recently.This increase in hashrate meant that more miners are participating to keep the network secured and more decentralized.However, it also meant that the competition for block rewards was becoming more fierce and that some miners are likely to be pushed out of the market.Miners face uncertainty One of the reasons for the growing tension among Bitcoin miners is the decline in miner revenue.
As the hashrate increases, the difficulty of mining new blocks also increases, making it harder for miners to earn rewards.This is further compounded by the decline in miner inflow, which suggests a decline in rewards received by miners.How many are 1,10,100 BTC worth today Miner outflow is another metric that could increase due to the above-mentioned factors.Thus, affecting Bitcoin’s prices in some way.Well, miner outflow, primarily increases when miners sell their mined Bitcoin to cover expenses, pay off debts, or simply take profits.As miner revenues decline, more miners may choose to sell their holdings, further driving down the price of Bitcoin.Calm under pressure But it won’t be just miners who would be looking to sell their holdings.Many Bitcoin holders might as well participate in selling.
This is because a large number of addresses holding Bitcoin were observed to be profitable.According to glassnode’s data, the percentage of Bitcoin addresses in profit reached an 8-month high of 67.287%.Read Bitcoin’s Price Prediction 2023-2024 However, at the time of writing, it was observed that Bitcoin holders were not transferring any BTC.This was showcased by the decline in the velocity of BTC over the last month.
The daily active addresses of Bitcoin also remained constant during this period.That said, the price of Bitcoin at press time was $22,729.18 and it increased by 0.61% in the last 24 hours.Despite the growing tensions among miners and the decline in miner revenue, the price of Bitcoin continues to rise.However, it remains to be seen how the mining industry will adapt to the changing landscape and how the ongoing tensions will affect the overall stability and security of the Bitcoin network.Bitcoin continued to hover around the $23,000 level on Jan.
23, as bullish sentiment remained high in markets.Over the weekend the world’s largest cryptocurrency rose to its strongest level since August, with bulls moving to consolidate these gains.Ethereum also traded in the green today, remaining above $1,600 in the process.Bitcoin Bitcoin (BTC) continued to trade near a five-month high to start the week, as sentiment in crypto markets remained bullish.Following a low of $22,387.90 on Sunday, BTC/USD hit an intraday peak of $23,056.73 earlier in today’s session.On Saturday, BTC rose to a high of $23,375, which was its strongest point since August 18, and it appears as though bulls are hoping to recapture this point.In order to achieve this, the 14-day relative strength index (RSI) will likely need to move back towards a ceiling at 91.00.
Currently, the index is at the 85.26 level, which is already overbought, and this could lead to some opting to secure gains and abandon previous positions.As of writing, BTC is trading at $22,876.55, which is marginally higher than Sunday’s peak.Ethereum Ethereum (ETH) also appeared to be consolidating the weekend’s gains, with prices remaining above the $1,600 mark.On Monday, ETH/USD has so far risen to a peak of $1,658.02, which is relatively close to Saturday’s four-month high at $1,680.Today’s peak comes as the world’s second largest cryptocurrency rebounded from a floor around the $1,610 mark.Looking at the chart, the rebound took place following a failed breakout of a support point of 75.00 on the RSI indicator.As of writing, the indicator is tracking at 75.23, with the next visible resistance level at 80.00 zone.ETH bulls will likely be still targeting a move above $1,700, and for this to occur, the 80.00 mark must first be overcome.
Register your email here to get weekly price analysis updates sent to your inbox: Tags in this story Could ethereum climb above $1,700 this week, despite prices being overbought? Leave your thoughts in the comments below.Eliman Dambell Eliman brings an eclectic point of view to market analysis.He was previously a brokerage director and online trading educator.Currently, he acts as a commentator across various asset classes, including Crypto, Stocks and FX, whilst also a startup founder.Image Credits: Shutterstock, Pixabay, Wiki Commons Disclaimer: This article is for informational purposes only.It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies.Bitcoin.com does not provide investment, tax, legal, or accounting advice.Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
On-chain data shows Bitcoin whales have accumulated $1.4 billion in the asset during the last two weeks, a sign that could be bullish for the coin.Bitcoin Whales Added 70,000 BTC To Their Holdings In Two Weeks As pointed out by an analyst on Twitter, BTC whales have been showing accumulation behavior recently.The relevant indicator here is the “Bitcoin Supply Distribution,” which is a metric from on-chain analytics firm Santiment that tells us which wallet groups in the market are holding what amount of the crypto right now.Wallets are divided into these groups based on the total number of coins they are holding currently.For example, the 10-100 coins cohort includes all wallets that are carrying a balance of at least 10 and at most 100 BTC.
The Supply Distribution metric for this specific group would then show the combined number of coins that are present in these wallets at the moment.In the context of the topic at hand, the wallet group of interest is the 1,000-10,000 coins group.Here is a chart that shows the trend in the Supply Distribution for this Bitcoin cohort over the past month: The value of the metric seems to have observed some rise in recent days | Source: Ali on Twitter The 1,000-10,000 coins wallet group is an important cohort for BTC as it includes addresses belonging to the whales.
Since the balances of these investors are huge (the lower and upper bounds of the range convert to $22.9 million and $229 million, respectively, at the current exchange rate), movements from this cohort may sometimes have visible effects on the price of the crypto.As can be seen in the above graph, the amount of Bitcoin being held by the whales was going down during December, suggesting that these humongous holders were selling their coins then.At the start of this year, however, the metric bottomed out and since then this cohort has shown net accumulation behavior.Interestingly, while this buying from the whales has taken place, the price of the crypto has observed a sharp rally.
Around five days ago, this BTC rally saw its first significant pullback and from the chart, it’s visible that these investors participated in some selling around it.
In the last few days, however, the 1,000-10,000 BTC wallet group has again done some buying as their Supply Distribution curve has once more spiked up.Following this latest accumulation, BTC has again caught a sharp uptrend as the price of the coin has now surged to almost $23,000.In all, these whales have added more than $1.4 billion worth of coins to their holdings in the last couple of weeks, taking their total holdings to 4.62 million BTC ($105.8 billion).
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