Bitcoin’s price is now consolidating between the $55,000 and $59,000 range, with the mid-$50,000 region as the support area. The trend takes place at the same time as on-chain fundamentals become stronger, like whale and address activity.
Since the Bitcoin rally began to really go out there around November 2020, the seven-day average active address has also increased simultaneously. One crypto trader, known as Crypto Birb, mentioned:
“$BTC seven day average over daily active addresses in sideways while price action climbs. The upside trend is the strongest when backed by on-chain trends.”
This basically means that on-chain trends have been supporting both the short and long-term cycles of Bitcoin’s price.
Big Whales Are Buying and Hodling
According to data provided by Santiment, big Bitcoin whales continue to acquire Bitcoin – more than 35,000 BTC have left the exchanges in the previous 30 days alone. These outflows have also pushed down the reserves of BTC from exchanges to the lowest levels recorded since early March 2021 – before Bitcoin went to reach the new ATH of over $60,000.
Santiment commented:
“As you’d expect, not all of #Bitcoin’s whales are behaving in unison. However, we’ve seen interesting trends these past couple months, such as 100-1,000 $BTC addresses adding 353k more $BTC since Feb. 1st, while 1k-10k addresses have shed 300k $BTC.”
Addresses that own between 1,000 BTC to 10,000 BTC have been selling, according to Santiment, but the analysts at Whalemap think that this range is not that easy to analyze.
This is because the range may also include exchange addresses, that generally aren’t tagged by the majority of on-chain data-gathering platforms. As a result, comparing 100 BTC to 1,000 BTC, and then 10,000+ BTC holding addresses would be more accurate.
“In the 1k-10k band there are a lot of exchanges. So this could be a part of it, as they are reducing the availability. Since these addresses could be exchanges, a better representation would be looking at 10k+ BTC and 100-1000 BTC,” revealed a specialist at Whalemap.
Furthermore, researchers at Glassnode discovered that when bull markets take place, old coins move more often.
When long-time hodlers move in order to sell, Bitcoin experiences significant selling pressure. But in the current phase of the cycle, the frequency of older Bitcoins moving is below 50%.
Glassnode explained:
“In bull markets old coins tend to move more. This increases the relative supply of younger coins in the network. At previous $BTC tops, around 50% of the #Bitcoin supply was younger than 6 months. We are currently significantly below this level (36%).”