In last week’s Week 19 weekly report, we analyzed several data related to the Bitcoin Network Ordinals and BRC-20, and subsequently made related reports in Glassnode Insight’s Weekly Report.
This week we will analyze the main reasons that caused Bitcoin to be blocked and unable to achieve further price breakthroughs, and where the key points found in the on-chain data analyzed based on the holding period appear.
The first thing we see is that according to the Exchange Whale Ratio data chart given by @CryptoQuant, in early May, the whale ratio of the exchange once climbed above 0.8, which also means that the Bitcoin tokens flowing into the exchange , there is more than 80% probability that it is dominated by whales. On the other hand, this range is also a reasonable price range for whales to sell their chips.
Note: Exchange Whale Ratio: The ratio of the top 10 high inflows to the total exchange inflows. A high value indicates that whales are using the exchange heavily.
So why do these whales who caused high inflows to the exchange choose to sell or transfer chips in this price range?
The reason is also very simple, because it has reached a price level with high returns for them. We can see Figure. 2. Since mid-March, Bitcoin’s total on-chain profitability has exceeded 70%, which is also the case in the past few years. Although the peak profit rate during the year is not as good as the 90%-99% profit rate that is often seen in the bull market, it is indeed an important consideration for a whale to decide whether to sell chips.
Note: Bitcoin UTXO Profit Rate (%): Supply in Profit / Total Supply, which means the profit rate created by the total UTXOs generated on the chain. The upward trend in value means that more investors are starting to make profits. leading to increased selling pressure.
On-chain data also shows that the whales that have recently flowed into the exchange are mostly long-term holders who have held the currency for more than 155 days, and are selling.
We can first see Figure 3a. The profitability of long-term holders has also reached the highest value in the year. Pushing back 155 days, you will find that the time will also fall in January, and their Bitcoin holding price, The lowest may be around 16k, so seeing that Long Term Holder has reached the highest SOPR value, everything becomes quite reasonable.
By the way, Figure. 3b also shows an interesting scene. The recent Bitcoin price range has fallen at a position similar to that in June 2022. What is interesting is that the current SOPR profitability is higher than last year. A head, this is also back to what was mentioned in the previous paragraph. When pushing back to the position of 155 days, one cost is the relative top and the other cost is the relative bottom. Of course, the resulting profitability will be hugely different.
Note: Long Term Holder's output profit, SOPR = selling price - cost price, can be regarded as the profitability of long-term holders.
Values above "1" indicate that more long-term investors are selling at a profit, values below "1" indicate that more long-term investors are selling at a loss.
Among these long-holding whales who have sold recently, which age group holds the majority? Analyst AxelAdler Jr on CryptoQuant also gave an answer from Bitcoin’s Sum Coin Age.
Holders of three to six months, starting from March this year, continued to accumulate Bitcoin until May, and then, under the temptation of the recent huge profit rate, they chose to start selling their chips, which is also in line with the previous years. The conclusion stated by Duan is that long-term whales who have held the currency for more than 155 days have recently begun to sell Bitcoin.
Note: Bitcoin total coin age distribution (SCA distribution), showing the distribution of long-term holders and short-term holders with UTxO profile.
Finally, let’s see what interesting things happen to the price action of short-term holders of Bitcoin.
As proposed by CryptoQuant analyst Mignolet, short-term holders of one to three months, in the past three years, have realized that the curve drawn by the price, just above the price action, will produce corresponding support and resistance phenomena.
After the previous sharp retracement in March, it was strongly held by this support and started a new wave of rising prices. A similar phenomenon has also occurred in the current decline. It depends on whether this support can continue to play an effective role in the future. indicators, continuing the bull market trend.
Note: Realized Price is calculated by dividing the total realized market value by the total supply.
This week we analyze the main reasons for Bitcoin price resistance and key points in the on-chain data. First of all, the whale ratio of the exchange shows that more than 80% of the Bitcoin inflows into the exchange are dominated by whales, which is a reasonable price range for whales to sell off their chips. Secondly, Bitcoin’s total on-chain profitability has exceeded 70%, showing the price level at which long-term holders can obtain high returns. In addition, selling behavior by long-term holders is more common among those who have held the currency for more than 155 days. Finally, there is the phenomenon of short-term holders creating support and resistance to Bitcoin price action.
The results of these analyzes provide insight into Bitcoin price movements and point out that the behavior of holders plays an important role in price. Understanding these factors will help investors make more informed decisions in future markets.
#BTC#WhaleRatio#CryptoQuant#UTXO#SOPR #Age
