Strong Bitcoin accumulation spotted as BTC price refuses to fall below $30K

Strong Bitcoin accumulation spotted as BTC price refuses to fall below $30K

Bitcoin (BTC)  price remained relatively flat over the weekend, inching closer to $34,000 on July 11. Nevertheless, BTC/USD has tumbled by almost 50% from its all-time high, near $65,000 in mid-April. But the massive downside move has not deterred investors from betting on the digital asset's long-term bullish outlook.

According to one of the Glassnode metrics, dubbed as Liveliness, the Bitcoin market has been noticing a shift in long-term investors' "macro hodling behavior." Hodling represents crypto investors' ritualized response to market downtrends, a meme-driven investment strategy that originated from a drunken forum post in 2013 and typo. 

Our top trading bots

Meanwhile, Liveliness is the ratio of cumulative coin days destroyed to the cumulative sum of all coin days ever accumulated by the network. It varies between zero and 1, with zero representing the highest proportion of dormant Bitcoin supply, i.e., HODLing behavior. It shows that the global coin day accumulation has been outpacing coin days destroyed in on-chain activity.

Strong Bitcoin accumulation spotted as BTC price refuses to fall below $30K
Bitcoin Liveliness ratio signals accumulation phase. Source: Glassnode

Nonetheless, a higher degree of distribution does not necessarily predict bearish cycles. For example, between November 2020 and April 2021, the Liveliness Ratio increased alongside the Bitcoin prices, suggesting that despite lower HODLing behavior, the Bitcoin market did not enter a bearish phase. 

That could be due to massive spikes in trade volumes at the beginning of this year. In the first quarter, Bitcoin trading activity, on the whole, spiked to over $6 trillion, compared to $1.14 trillion in the fourth quarter of 2020, according to data obtained from Bitcoinity.

Strong Bitcoin accumulation spotted as BTC price refuses to fall below $30K
Monthly Bitcoin trading volumes. Source: Bitcoinity.org

Therefore, while the long-term holders started spending their Bitcoin between November 2020 and April 2021, higher trading volumes across all crypto exchanges show that retail demand absorbed the selling pressure. But by April, as analyst Willy Woo noted, the selling overran the normal bull market buying pressure.

Speculative participants started selling off their new coins to long-term holders, Woo wrote in a newsletter published on July 2 while referring to a so-called “Rick Astley” chart that studies Bitcoin flows between strong and weak hands. Excerpts:

"It’s very clear to see that long-term holders are mopping up the speculative coins at a strong pace. It’s now a waiting game until this is reflected in the price action, the data is confidently pointing to an accumulation bottom forming."
Strong Bitcoin accumulation spotted as BTC price refuses to fall below $30K
Bitcoin is moving from weak hands from strong hands. Source: Willy Woo Newsletter

Bitcoin holds $30K

A spike in Bitcoin accumulation sentiment appears as the cryptocurrency continues to maintain its bullish bias above a strongly-held $30,000-support level. 

Strong Bitcoin accumulation spotted as BTC price refuses to fall below $30K
Bitcoin trend remains stuck between $30,000 and $40,000. Source: TradingView

The BTC/USD exchange first dropped to $30,000-level on May 19, during the overall cryptocurrency market crash. Since then, the pair has tested the price floor at least four times, only to witness a strong upside rebound later. That has made $30,000 a psychological support level, which, if broken to the downside, risks crashing the Bitcoin prices to as low as $20,000.

Joel Kruger, a forex strategist at London-based investment management group LMAX, noted earlier this week that Bitcoin could revisit $20,000, for it remains under the pressure of global market sentiment. The analyst was referring to the latest meltdown in stock markets, on worries linked to the spread of the Delta variant of Covid-19.

"It would be foolish to rule out the possibility for a drop back below the June low, and we think there would be a risk in that scenario where the #Bitcoin price could revisit the old record high area around $20,000," he added.

"But at that stage, we see the market very well supported."

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Continue reading upon Cointelegraph
AML compliance mandatory for foreign crypto exchanges, says Korean regulator
Eun Sung-soo, chairman of South Korea’s Financial Services Commission (FSC), has said that foreign crypto exchanges that deal in the Korean won must comply...
More Brits bought crypto than shares last year new survey suggests
A new survey suggests Brits have become more eager to invest in cryptocurrencies than in traditional stocks and shares-based investments.UK investment firm...
Shanghai Man: Bitcoin interest drops in China amid crackdown on social media and miners
This weekly roundup of news from Mainland China, Taiwan, and Hong Kong attempts to curate the industry’s most important news, including influential projects,...
Finance Redefined: The shadow DeFi conference in Miami! June 2-9
Last week, I made the mistake of being just about the only DeFi denizen who actually went to the Bitcoin 2021 event in Miami. While I managed to catch up...
Stablecoins not that radical, says Bank of England official
There has been much commotion about stablecoins among central bankers, regulators and lawmakers in recent years, most notably in the furor surrounding Facebook’s...
Price analysis 6/9: BTC, ETH, BNB, ADA, DOGE, XRP, DOT, UNI, SOL, BCH
Bloomberg Intelligence senior commodity strategist Mike McGlone believes that Bitcoin (BTC) is more likely to rally to $40,000 than slump to $20,000. This...
Kazakhstan’s government to create roadmap for developing crypto market
Kazakhstan’s government is forming a roadmap to stimulate the development of the cryptocurrency industry and blockchain technology in the country.State...
Former Apple Music exec joins crypto firm Ledger as head of NFT division
Apple Music veteran Parker Todd Brooks is leaving the company to join Ledger, one of the biggest providers of cryptocurrency hardware wallets.According...
Total crypto market capitalization posts new all-time high above $1.9T
Amid another bullish trend on cryptocurrency markets, total crypto market capitalization has broken a new historical record just unde $2 trillion.The market...
Strong fundamentals push Dent, Arweave (AR) and Enzyme (MLN) price higher
According to a report by Coinshares, as of March 20, the weekly inflows into institutional crypto products has declined by about 59% when compared to the...
Danish Red Cross sponsors $3M blockchain-based volcano catastrophe bond
Crypto and blockchain adoption for humanitarian causes is set for another expansion as the Danish Red Cross has sponsored a catastrophe bond aimed at providing...
Crypto-Expert Brian Kelly Says 2019 Will Bring No Approval to BTC ETF
For the past year, various ETF-projects have been failing to receive the green light from American regulators. And despite the bullish ambitions of twin-entrepreneurs...
Monero To Hard Fork - MoneroV
Recently it became known that MoneroV (XMV) is planned on the Monero network. It should take place on block 1529810. It is expected that this will happen...
The Market Capitalization Of The Cryptocurrencies Has Again Fallen Below $400 Billion
The new week started for the market of cryptocurrencies on a negative trend - all without exception the assets of the first hundred of the Coinmarketcap...
Move Over, Bitcoin. Which Digital Currency May Substitute the “Big Daddy”?
It seems that cryptoinvestors want to set foot in the same river twice, as bitcoin’s boosting is fostering the migration to a few digital ilks. The rise...