Bitcoin has been oscillating within a narrow range of $51,000 to $52,000 in recent days, unable to continue its upward trend. However, market sentiment remains optimistic. On-chain data shows that the selling speed of long-term holders has significantly decreased, and the balance of Bitcoin in exchange wallets has dropped to a new low since April 2018, as the halving approaches.
Bitcoin briefly surged to nearly $53,000 on the 20th, reaching a new high since November 2021, but it then started to retreat and oscillate. In recent days, it has been fluctuating between $51,000 and $52,000, dropping to $50,625 at one point last night. However, the latest on-chain data indicates that market sentiment remains optimistic.
According to data from IntoTheBlock, long-term holders of Bitcoin have sold approximately 200,000 BTC since the beginning of this year. This selling trend has been ongoing for nearly three months, resulting in a continuous decrease in the Bitcoin holdings of long-term holders.
Despite the selling activity, IntoTheBlock points out that this is a typical behavior of long-term holders during a bull market. Compared to the previous bull market, there is a significant difference in the selling speed. During the last bull market, the holdings of long-term holders decreased by about 15%, whereas the current decrease is only about 1.5%.
The impact of the selling activity has been offset by a large amount of Bitcoin accumulation by various investors. Data released by CryptoQuant’s CEO, Ki Young Ju, shows that on the 21st, there was an inflow of 25,300 BTC into Bitcoin accumulation addresses, reaching a historical high. These accumulation addresses must meet certain criteria, including no outgoing transactions, a balance of more than 10 BTC, not belonging to centralized exchanges or miner accounts, having received two or more incoming transactions, and the most recent transaction occurring within the past seven years.
Furthermore, the amount of Bitcoin held by exchanges has been declining significantly since mid-March 2020, indicating a change in investor behavior. The highest percentage of Bitcoin supply held by exchanges was over 17% in 2020, but it has been continuously decreasing since then, reflecting investors’ tendency to continuously accumulate Bitcoin outside of exchanges.
According to data from Glassnode, the amount of Bitcoin held on exchanges has been consistently decreasing since the beginning of this year. From January 1st to February 19th, the Bitcoin balance in exchange wallets has dropped from 2.356 million BTC to 2.314 million BTC, reaching the lowest level since April 2018. As a result, the proportion of Bitcoin supply held by exchanges has decreased from 12.03% at the beginning of this year to 11.79%.
Bitcoin is approaching its fourth halving in April this year. Looking back at the previous three halvings, the price of Bitcoin has significantly increased. Anthony Scaramucci, the founder of SkyBridge Capital, predicted last month that Bitcoin would soar to at least $170,000 after this halving and could even reach $400,000 in the future.
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