A detailed analysis of the Bitcoin price action reveals that the cryptocurrency is currently experiencing a consolidation phase below the $35,000 support level. Despite this, data from on-chain sources indicates that the majority of Bitcoin holders are maintaining their positions, with a record high of 88.5% of Bitcoin unmoved within a three-month timeframe. This suggests that investor sentiment remains bullish. Furthermore, since the beginning of October, Bitcoin has seen a 26% increase in value, indicating significant upside potential.
Although Bitcoin briefly surpassed the $35,000 mark multiple times this week, resulting in profitable outcomes for many Bitcoin wallets, the cryptocurrency has since dropped below this level. However, long-term investors continue to be optimistic about the future prospects of Bitcoin, according to on-chain analytics. One important metric that provides insight into the current Bitcoin cycle is Glassnode’s HODL Waves.
The HODL Waves metric categorizes Bitcoins based on their age in wallets. Bitcoins that have recently been transferred into wallets are represented by the color red, while older Bitcoins appear as purple. Recent data from this metric suggests that nearly 90% of the total Bitcoin supply has remained inactive over the past three months.
Another metric, provided by IntoTheBlock, confirms the trend of retail traders aligning with long-term holders. This shift is likely influenced by the anticipation of a Bitcoin spot ETF approval by the U.S. Securities and Exchange Commission (SEC). IntoTheBlock’s holding metric shows that the number of addresses holding Bitcoin for more than one year has reached an all-time high of 34 million.
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Investors are particularly hopeful about the SEC’s approval of spot Bitcoin ETFs, as it is expected to trigger the next bullish run in Bitcoin’s price. Valkyrie Investments, a leading firm in the industry, is confident that these ETF applications will be approved by the end of the month, adding to positive sentiment among investors.
However, some market analysts, such as Singapore-based QCP Capital, attribute the recent spike in Bitcoin’s price to macroeconomic forces, such as the decrease in U.S. bond yields, rather than the excitement surrounding spot ETFs. When bond yields are low, investors tend to seek higher-yield investments like Bitcoin.
Overall, Bitcoin appears to be in a consolidation phase, waiting for either a resurgence in buyer interest or a catalyst to drive the next rally. It is worth noting that the last time Bitcoin’s supply reached 88% in this metric was during a consolidation phase in late 2022, which resulted in Bitcoin dropping below $20,000. A continued consolidation phase could potentially lead to a similar pattern, with Bitcoin breaking below its current range and reaching $30,000.
In conclusion, despite the current consolidation phase, the number of unmoved Bitcoins and the positive investor sentiment indicate that the future prospects for Bitcoin remain strong. The anticipated approval of spot Bitcoin ETFs by the SEC and macroeconomic factors contribute to this positive outlook. However, the market will continue to closely monitor the consolidation phase and for any catalyst that may drive the next significant movement in Bitcoin’s price.
