Over the last week, the world’s largest cryptocurrency Bitcoin (BTC) has flipped the $40,000 into resistance. As of press time, BTC is trading at $39,509 with a market cap of $751 billion.
But some on-chain signals suggest that the worst might be behind us and we could be preparing for a major bull run ahead. Citing data from Glassnode, analyst On-Chain College explains that the 30-day change in the Bitcoin Exchange Balance has hit negative levels seen very few times in the last 2 years.
Thus as the amount of illiquid supply for Bitcoin continues to grow there could be a supply crunch leading to a price surge.
As we can see in the above chart, Bitcoin has registered a strong rally whenever the exchange supply dropped to negative 100K. As CoinGape reported, the recent BTC price correction has been due to the strong correction in the U.S. equity market. Soaring inflation and Fed’s hawkish stand have further dampened investor sentiment. As Glassnode notes:
The most hawkish action by the Fed at next week’s meeting may already be priced in, and any less severe outcomes could drive Bitcoin above $42k. Bitcoin selling pressure is easing. Less profit-taking, destruction, and more inactive supply.
Retail Investors Are Buying Bitcoin, Hast Rate at ATH
The good thing about Bitcoin is that retail investors have been consistently buying the dips. Data presented by IntoTheBlock notes:
Retail is buying $BTC. The balance held by addresses with <10 BTC has soared to 2.08m BTC. It’s important to note the growth in the balance of addresses with 0.001 – 0.01 BTC and 0.01 – 0.1 BTC, increasing by at least 2% in 30 days.
On the other hand, the Bitcoin network mining hash rate and difficulty have touched a new all-time high. The Bitcoin mining activity has picked up over the last few months after it collapsed during the China ban last year. As per current data, the Bitcoin network is the most secure than ever before.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.