Understand Bitcoin Liquidity Abundance To Spot Bitcoin Rally
We have seen Bitcoin Spot Price consolidating below the new ATH of $73K over the last three week, BTC hit $73K in mid March 2024.
We can see that the on-chain volume in March 2024 have risen significantly, this is attributed to the new investors buying at higher price from the existing BTC long-term investors, these long-term holders are entering distribution phase,
With this new injection of new capital into the crypto asset class, this has helped to drive the realized cap to a new heights.
Bitcoin Realized Market Cap At New Height ($555 Billion)
At time of this writing, we can see that the current realized market cap stand at new height of $555 billion. We are also seeing capital continues to flow into Bitcoin and the rates are now exceeding $79 billion per month.
Profit Taking Behaviour To Take Note
If we were to look at the transaction on the Bitcoin Network, we can see that the volume increased recently, and this could show that both long-term and short-term investors are taking profits.
But the more significant group would be the long-term holders as we could see that the transfer of Bitcoins from long-term investors to new ones have been increasing, and we could see that happening over the period in March and April.
Increased Liquidity Seen From Younger HODL
As we see Bitcoin price action go above the ATH in middle of March, this has also seen more younger HODL group coming in as the Bitcoins transaction changed hands, this in terms has created fresh demand and we also see long-term investors selling to take profits.
With the help of this tool from Glassnode, we can actually filter the age groups of Realized Market Cap, using the Realized Cap HODL Wave metric, I find it useful for me to see and separate the distribution of USD denominated wealth held across various age bands.
I am more interested to see what happen since beginning of 2024, so if we segregate for coin-ages younger than 3 months, we can see that from Jan-Apr, we could see that there are a sharp increase from 2 smaller groups, 1m-3m, 1w-1m, these newer investors now own approximate 44% of the Bitcoin aggregate wealth.
This increase from younger group is because of long-term holders are exiting their coins at higher prices because of increase inflowing demand.
Summary
If we could still see similar demand from the younger group, there is possibility of Bitcoin making another aim at new ATH higher than $73K.
But we need to consider whether the inflowing demand is the same as before, and whether the impact of halving play a part in this as well. I am confident that we could see similar play nearer to halving, possibly a few days prior,
These are the stocks and ETFs you can look at and monitor, $MicroStrategy(MSTR.US$ $Grayscale Bitcoin Trust(GBTC.US$ $iShares Bitcoin Trust(IBIT.US$
Appreciate if you could share your thoughts in the comment section whether you think Bitcoin rally would return because of liquidity abundance due to wealth shift and inflowing demand?
Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.
Disclaimer: Community is offered by Moomoo Technologies Inc. and is for educational purposes only.
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SpyderCall : good read. You should keep everyone updated on all of this info from time to time. There is not a lot of transparent on-chain data available to the public to help them make better crypto investment decisions. Where do you get your crypto data from? I see Glassdoor. Do you get your crypto data from any other sources?
BelleWeather : Interesting post! I like to see the age skew and find the long term holders selling to be key. I think one of the most important things to keep an eye on are the inflows into spot ETFs and when Greyscale stops outflows. Additionally, I will be taking my cue to sell or hold Microstrategy in the future, from adoption of bitcoin by other corporations, Japan’s pension fund and sovereign wealth funds. If things move apace in that direction, I expect volatility to continue to decrease and a huge drop less likely. And the counter to all of that is also true. So I will act accordingly. I’m worried about my MSTR holdings, so find information from others, helpful. BTC itself, is a hold and forget about it for a decade or more for me.
nerdbull1669OP SpyderCall: Thank you for your support! I have a pretty large holdings of Bitcoin, so I am doing research and also create some tools to better understand crypto investment. I leverage on data providers whIch I subscribe to build my tool. Hope this help!
nerdbull1669OP BelleWeather: I will try to share more on long term and short term holders liquidity as we approach the halving events. For crypto stocks like MSTR, it will experience some volatility prior to halving before stabilising. Hope this helps!