{"id":263356,"date":"2021-05-31T22:05:00","date_gmt":"2021-05-31T19:05:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/3-on-chain-indicators-suggest-the-bitcoin-price-sell-off-is-losing-steam\/"},"modified":"2021-05-31T22:05:00","modified_gmt":"2021-05-31T19:05:00","slug":"3-on-chain-indicators-suggest-the-bitcoin-price-sell-off-is-losing-steam","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/3-on-chain-indicators-suggest-the-bitcoin-price-sell-off-is-losing-steam\/","title":{"rendered":"# 3 on-chain indicators suggest the Bitcoin price sell-off is losing steam"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a41183a4f0ec\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a41183a4f0ec\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/3-on-chain-indicators-suggest-the-bitcoin-price-sell-off-is-losing-steam\/#Bitcoin_Spent_Output_Age_Bands\" >Bitcoin: Spent Output Age Bands<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/3-on-chain-indicators-suggest-the-bitcoin-price-sell-off-is-losing-steam\/#Bitcoin_balance_on_exchanges_drops\" >Bitcoin balance on exchanges drops<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/3-on-chain-indicators-suggest-the-bitcoin-price-sell-off-is-losing-steam\/#Bitcoin_accumulation_addresses_and_balances_rise\" >Bitcoin accumulation addresses and balances rise<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># 3 on-chain indicators suggest the Bitcoin price sell-off is losing steam <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>Bitcoin (BTC) entered a consolidation phase following its May 19 crash from $42,600 to $30,000 on Coinbase. The flagship cryptocurrency recovered its losses quickly and reclaimed $40,000 but it failed to log a clear bullish breakout above this resistance level and at the time of writing the price remains pinned below $40,000.<\/p>\n<p>The latest price action in the Bitcoin market has been \u2014 at best \u2014 choppy, with traders showing no clear indication about their short-term bias. Some analysts <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/seekingalpha.com\/article\/4432045-bitcoin-terrible-technicals-bitcoin-could-collapse-back-to-20k-soon\">predicted<\/a> that if the BTC\/USD price does not break above $40,000, it may very well fall to as low as $20,000 in the coming sessions.<\/p>\n<p>Interestingly, a handful of on-chain indicators tell a different story. One of the most interesting <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">theme<\/a>s holding Bitcoin&#8217;s bullish bias intact is witnessing long-term holders and accumulation addresses stacking more BTC\u00a0during the recent price dip. <\/p>\n<p>Furthermore, a metric known as the Bitcoin Entity-Adjusted SOPR (Spent Output Profit Ratio) shows that the market is no longer selling Bitcoin at a loss on aggregate.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-05\/52281fce-0d98-4df1-bfc8-a5a5ea9d36f0.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\">Bitcoin Entity-Adjusted SOPR. Source: Glassnode<\/figcaption><\/figure>\n<p>Meanwhile, on-chain data shows that exchanges saw a decline in their reserves, a signal that traders have been withdrawing their digital assets to cold wallets or depositing them into DeFi liquidity pools for more lucrative returns.<\/p>\n<p>While the short-term perspective may be tilted toward bears, the following three on-chain indicators hint that Bitcoin could be in the process of bottoming out.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoin_Spent_Output_Age_Bands\"><\/span>Bitcoin: Spent Output Age Bands<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The correction in Bitcoin price resulted in three kinds of reactions in the spot market. The first involved panic-selling by short-term traders who sold Bitcoin to minimize their losses, probably because they bought the cryptocurrency near its top.\u00a0<\/p>\n<p>The second reaction involved HODLERs that decided to hold on to their exiting bitcoin supply. They showed a long-term conviction in Bitcoin&#8217;s bullish bias against supportive macroeconomic fundamentals, such as ultra-low interest rates, poor yields on government bonds, inflation fears and a declining U.S. dollar, that made hedging assets like Bitcoin look attractive to HODL.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">The best way to build wealth with <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/hashtag\/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw\">#Bitcoin<\/a> is to be boring. 2 fast, quick, simple, steps:<\/p>\n<p>1. Buy <br \/>2. HODL<\/p>\n<p>It&#8217;s really that simple.<\/p>\n<p>\u2014 Paul McNeal #BTC100K   \ufe0f\u200d  (@_CryptoCurator) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/_CryptoCurator\/status\/1398299144570220549?ref_src=twsrc%5Etfw\">May 28, 2021<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The third reaction was a mix of HODLers and accumulators as traders utilized the Bitcoin price dip to buy more of the cryptocurrency at a &#8216;discount&#8217;.<\/p>\n<p>Various on-chain indicators\u00a0showed a huge contrast between the Bitcoin reserves held by short-term holders and long-term holders during the price crash. <\/p>\n<p>For example, the &#8216;Bitcoin: Spent Out Age Bands&#8217; chart below, last week saw a greater amount of selling coming from coins that were one day to one week old. These coins kept moving in and out of the market, accurately reflecting the state of higher price volatility in the market last week.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-05\/810981f3-c3e1-4662-bd40-db6f8463a42d.png\"><figcaption style=\"text-align: center;\">Bitcoin spent output age bands, calculated per seven-day moving average. Source: Glassnode<\/figcaption><\/figure>\n<p>Meanwhile, coins that remained unspent for 1 to 3 months and 3 to 6 months also changed addresses in the wake of the recent price crash.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-05\/0bd78c68-2e48-4846-a360-8033a1d66c42.png\"><figcaption style=\"text-align: center;\">Traders that held Bitcoin in wallets for 1-6 months moved them in May. Source: Glassnode<\/figcaption><\/figure>\n<p>Another Glassnode metric dubbed the &#8216;Bitcoin: Total Supply Held By Long-Term Holders&#8217;\u00a0showed that long-term holders \u2014 entities that hold Bitcoin for more than six months, became the largest beneficiaries of the tokens sold by the short-term holders.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-05\/a6a34ca5-82c7-4eb5-9fbe-d7c923b2c268.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\">Bitcoin supply held by long-term holders kept increasing amid the May crash. Source: Glassnode\u00a0<\/figcaption><\/figure>\n<p>In a weekly note to clients, Anthony Pompliano, investor at Pomp Investments,\u00a0said:<\/p>\n<blockquote><p>&#8220;Long-term holders are adding to their positions, short-term holders are selling, some entities in the short-term cohort have now reached the 155-day threshold for this metric and are now in the long term cohort.&#8221;\u00a0<\/p><\/blockquote>\n<p>This divergence pointed to long-term stability in Bitcoin price as more and more serious holders took positions against the ongoing macroeconomic crisis.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoin_balance_on_exchanges_drops\"><\/span>Bitcoin balance on exchanges drops<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The net Bitcoin reserves held by cryptocurrency exchanges have also declined in the past seven days, showing that fewer and fewer traders now want to sell their Bitcoin holdings.<\/p>\n<p>The metric points to a typical trading behavior. Traders only deposit Bitcoin to their exchange wallets when they want to either sell them for fiat or trade them for other digital assets. As a result, the BTC reserves on trading platforms rise.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-05\/a8e6a43e-65e5-429d-a152-a26889606a3d.png\"><figcaption style=\"text-align: center;\">Exchanges bitcoin reserves are down 14,207 BTC in the last 7 days. Source: Glassnode<\/figcaption><\/figure>\n<p>Conversely, a higher degree of BTC withdrawals reflects traders&#8217; decision to hold the cryptocurrency. It means that Bitcoin would not face im<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">media<\/a>te sell-off pressure in the spot market, which is what the latest Glassnode readings show.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bitcoin_accumulation_addresses_and_balances_rise\"><\/span>Bitcoin accumulation addresses and balances rise<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The total number of accumulation addresses and the balance within these wallets are rising. In retrospect, an accumulation address is the one that has received at least two BTC transactions but has never moved the assets out of the address.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-05\/09047ff3-84e4-4e4e-a2ed-32ce4f78fdeb.png\" alt=\"\" title=\"\"><figcaption style=\"text-align: center;\">Convinced Bitcoin bulls continue stacking through the price dip, Source: Glassnode.<\/figcaption><\/figure>\n<p>In the last seven days, the number of these accumulation addresses has climbed, adding 7,430 new wallets to the list.<\/p>\n<p>Another metric dubbed the &#8216;Bitcoin: Supply Held by Entities with Balance 0.01 &#8211; 0.1&#8217;\u00a0showed that new users entered the Bitcoin network during its price dip. Additionally, supply held by addresses that have \u00a00.001 BTC to 1 BTC in them increased in tandem, showing steady growth in retail interest.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-05\/0be011a7-e331-44b8-9a99-89647c98e444.png\"><figcaption style=\"text-align: center;\">Bitcoin supply held by wallets holding 0.01-0.1 BTC spikes as prices fall. Source: Glassnode<\/figcaption><\/figure>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/3-on-chain-indicators-suggest-the-bitcoin-price-sell-off-is-losing-steam\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# 3 on-chain indicators suggest the Bitcoin price sell-off is losing steam &#8221; Bitcoin (BTC) entered a consolidation phase following its May 19 crash from $42,600 to $30,000 on Coinbase. The flagship cryptocurrency recovered its losses quickly and reclaimed $40,000 but it failed to log a clear bullish breakout above this resistance level and at&#8230;<\/p>\n","protected":false},"author":1,"featured_media":263357,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDUvMDgzMTJkOTAtMDM4NC00ZTkzLWFiODQtZGM5MGEyNGYyOWZlLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,81951,74937,74863,74860,74939,73785],"class_list":["post-263356","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-analysis","tag-bitcoin-price","tag-cryptocurrencies","tag-cryptocurrency-exchange","tag-market-analysis","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/263356","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=263356"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/263356\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/263357"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=263356"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=263356"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=263356"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}