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Is Bitcoin Bottom In? Here’s What the Long-Term Behavior of BTC Holders Suggests, Says Crypto Analytics Firm

A leading analytics firm says that the one key metric indicates Bitcoin () has formed a bottom, setting the stage for a rally.

According to blockchain analytics firm IntoTheBlock, a large increase in the number of addresses holding the king crypto for more than a year has occurred during previous bottom formations prior to a big surge.

IntotheBlock says a similar huge increase in long-term Bitcoin holders occurred in 2022.

“Some metrics suggest the bottom may be in. In 2022 we saw the amount of Bitcoin owned by addresses holding for over one-year increase by 50% from 10 million BTC to 15 million BTC.

This same pattern has been observed in previous bear markets.”

Source: IntoTheBlock/Twitter

Another crypto analytics firm, Glassnode, also suggests Bitcoin has formed a bottom based on several key indicators.

Per Glassnode, an increase in demand could indicate Bitcoin’s recent 30% surge is sustainable.

“A sustainable market recovery is usually accompanied by a growth in network on-chain activity.”

The firm says strong growth is signaled when the 30-day simple moving average (SMA) of new address crosses above the 365-day SMA for at least 60 days.

“An initial burst of positive momentum occurred in early November 2022. However, this has been sustained for only one month so far.”

Source: Glassnode

Another indicator is a significant increase in miner revenue from fees, which the firm says is occurring.

“When the 90D-SMA of Miner Fee Revenue crosses above the 365D-SMA, it signals a constructive uptick in blockspace congestion and fee pressure is underway.”

Source: Glassnode

Glassnode also says the formation of a “robust foundation” is signaling a bottom formation for Bitcoin.

“An early indication of a macro trend reversal coming off such a foundation tends to be a sharp surge in the Percent of Total Supply in Profit…

When the percent of supply in profit breaks above that of LTHs (long-term holders), it often signifies a large-scale supply redistribution has occurred over recent months.”

Source: Glassnode

Lastly, Glassnode says that Bitcoin appears to be “hitting rock bottom,” defined as the point when “seller exhaustion may be reached, and where price declines are having a diminishing effect on motivating additional sell-side activity.”

“Periods where the correlation between price, and the percent of supply in profit deviates below 0.75 indicates that a saturation of the holder base, by relatively price insensitive holders, has taken place.”

Source: Glassnode

At time of writing, Bitcoin is changing hands for $21,361.


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