Data insight丨Do most users still buying Bitcoin?

As long-term holders significantly slowed their selling, the price of Bitcoin continued to stay above US$50,000, and new batch holders has appeared.

Bitcoin fell from its highest point of US$58,328 to its lowest point of US$50,929 in the day. Despite this, long-term holders significantly slowed down their selling, long-term holdings began to mature, and the continued outflow of exchanges showed that the hoarding has not slowed down.

Bitcoin

This week we witnessed the signal showing that the currency is mature on the chain, because the currency that entered the circulation earlier in this round of bull market has been accumulated for sometimes. Many people are being classified as long-term holders (LTH). These are the first signs for a new generation of holders who have entered in 2020 and 2021.

This week we have seen continued growth of coins between 1 month and 6 months, which represents the maturity of the accumulated coins in the entire bull market. Once the age (holding) of a bitcoin exceeds 5–6 months, it is more likely to remain dormant. Once the life span exceeds 155 days, it will be reclassified as a long-term holder (LTH) coin. Thus, this making the age group between 3 months and 6 months very important when looking for the strength and growth of new holders.

Bitcoin

Below are some backgrounds on the prices as Bitcoin market is constantly changing.

The price six months ago was US$18,000 (less than $20,000 ATH).

The price three months ago was US$26,600 (before the first major correction).

The price one month ago was US$47,700 (the bottom of the second major correction).

(Note: Can you believe that the price was US$18,000 6 months ago?)

The data shows that the trading volume of coins with a lifespan of between 1 and 6 months has exceeded 9.51% of the supply, which has accelerated significantly in the past three months. The purchase of coins with a price between 10,800 and 58,800 currently accounts for 25.43% of the total supply, and there is no sign of slowing down.

Bitcoin

This shows that buying from the top has been normalized. In fact, this combined holding looks the same as the price chart but has moved to the right for 1 month. The message delivered here is that investors and traders continue to buy BTC throughout the bull market.

It is particularly worth paying attention to the currency balance on Coinbase, which is the preferred place for the U.S. institutions to accumulate currency. We can see that the game has changed in December 2020. As the price of BTC approaches US$20,000 of ATH in the previous cycle, the market confidence has increased, and the institutional accumulation has begun. This started with 37.4k BTC withdrawn in December.

In the following months, an incredible phase of the “whale cost average” model emerged, because tens of thousands of coins were accumulated every month. The consistency, frequency, and scale of this balance change in the on-chain data are shocking, and it truly reflects the positive accumulation of institutions this year.

Bitcoin

Observing the dynamics of supply and demand on the chain is a fascinating process. Through the life of the currency, considering the age group, consumption behavior, and the exchange balance, we can establish an overall flow model of the currency in the entire network.

It is important to remember that monitoring exchange inflows and outflows is a dynamic system with imperfect data. The key is to treat all these indicators as indicative and consider them in the context of wider macro trends and contexts. At Glassnode, our goal is to present the highest quality and most accurate data possible, using publications like this to indicate our context.