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Anchin’s analysis: Examining the possible scenarios of the upward and downward trend of the Bitcoin price

تحلیل آنچین: بررسی سناریو‌های احتمالی روند صعودی و نزولی قیمت بیت کوین

While traders are waiting for the final breakout of the Bitcoin price, the price jump to the $21,000 mark on October 26 (November 4) cannot yet be taken as a confirmation that $20,000 will become the new support line for Bitcoin. This small jump in price made such analysts to examine the possible bullish and bearish scenarios of Bitcoin.

To Report Cointelegraph analysts in its latest weekly Glassnode newsletter have drawn a bullish scenario and a bearish scenario for the future trend of Bitcoin’s price.

According to this report, in the bearish scenario, the limited activity of such transactions, the stagnation in the growth of addresses with non-zero balances and the decrease in the profits of miners will lead to the risk (pressure) of selling Bitcoin. Of course, the data also suggests that long-term investors are more determined than ever to put up with the current bear market.

In contrast, the bullish scenario assumes an increase in the number of whale wallets, capital outflows from centralized exchanges, and hoarding of Bitcoin by long-term investors.

A slowdown in the growth of new addresses

The growth of such active addresses throughout the Bitcoin network has remained stagnant. A decrease in transactions means a decrease in the use and growth of users in the network; Factors that can possibly hinder the growth of Bitcoin price.

Graph of active address transactions versus Bitcoin price
Graph of active address transactions versus Bitcoin price

The number of new addresses in the Bitcoin ecosystem has remained constant, with non-zero balance; A process that also occurred in November 2018. The halt in the growth of addresses with non-zero balances in 2018 was accompanied by a drop in the price of Bitcoin. This index did not start to increase until the price recovery in January 2019 (D 97).

Anchin's analysis: Examining the possible scenarios of the upward and downward trend of the Bitcoin price
Graph of new addresses with non-zero balance

Selling miners can cause selling pressure

In the past years, many miners have accumulated large amounts of Bitcoin. However, since the beginning of the bear market, many miners have sold their bitcoins to cover investment and operational costs.

Miners are deleveraging (reducing debt by selling capital) by selling their newly mined bitcoins amid rising mining costs and declining revenues. Glassnod warned:

Miners’ deleveraging could lead to a widening weakening of the order book, a historic decline in demand, continued macroeconomic instability, and liquidity constraints.

Miners may be forced to sell more of their Bitcoin holdings as the price and profitability of Bitcoin mining declines.

Graph of bitcoin balance in miners' wallets
Graph of bitcoin balance in miners’ wallets

Whales hoarding bitcoins

As opposed to falling in the current bearish market conditions, many whales with more than 10,000 BTC are likely to be accumulating more. The chart below shows that aftermarket whales continue to accumulate Bitcoin in April and September.

Anchin's analysis: Examining the possible scenarios of the upward and downward trend of the Bitcoin price
Bitcoin accumulation trend chart

Reducing sales pressure by withdrawing Bitcoin from centralized exchanges

The withdrawal of Bitcoin from centralized exchanges can reduce the pressure of immediate selling in the market. Coinbase, one of the centralized exchanges with high trading volume, has seen large outflows of Bitcoins. If we compare the current outflow of Bitcoin from Coinbase with the peak price period after March 2020 (Esfand 98), we see the outflow of more than 48% of the total Bitcoin balance of the exchange.

Glassnod notes:

Coinbase has seen a macro-scale net withdrawal of 41,600 bitcoins this week… It is important to note that these outflows are based on our best estimated wallet categories and appear to be a mix of bitcoins. which have been deposited into investors’ wallets and organizations’ custodial accounts.

Bitcoin balance chart at the disposal of Coinbase exchange
Bitcoin balance chart at the disposal of Coinbase exchange

Investors continue to hoard

According to the “Realized Cap HODL Waves” indicators, the total dollar wealth in the form of Bitcoin that was valued at the time of the last transaction of each coin; It is now disproportionately skewed towards long-term Bitcoin investors.

The proportion of wealth held (in the form of Bitcoin) in coins that have moved in the past three months is now at an all-time low. Conversely, wealth held in coins older than three months (increasingly hoarded by investors) is now at an all-time high.

Anchin's analysis: Examining the possible scenarios of the upward and downward trend of the Bitcoin price
Bitcoin Hodel Wave Chart

Some analysts believe that the low volatility of Bitcoin during this period is the calm before the storm, and the economic growth and current price of Bitcoin may indicate the will of (long-term) investors as a winning factor.

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