- Long-term Bitcoin holders have bought nearly 750,000 BTC worth 33.8 billion in the last month and half.
- On-chain analyst Will Clemente observes that the current price action is similar to that in 2013 and 2016 ahead of a BTC bullrun.
- Traders' outlook on Bitcoin turns bearish with low levels of daily trade volume and piling short positions.
There is an increase in sell-side pressure on Bitcoin with an increase in new buyers. This is absorbed through accumulation by long-term holders.
Mid-cycle consolidation observed in Bitcoin as long term holders accumulating BTC ahead of "double bubble"
Bitcoin is currently range-bound below $45,000. Analysts consider the fatigue observed in the Bitcoin market as a sign of profit-taking by retail traders, while institutions and large wallet investors add to their holdings.
Will Clemente, the lead insights analyst at Blockware, a Blockchain infrastructure and cryptocurrency mining company, tweeted
Price down today while whale holdings went up by ~13,000 BTC. Funny how that works. pic.twitter.com/a6tb2DiqxH
— Will Clemente (@WClementeIII) August 18, 2021
Clemente notes that long-term holders have added $585.1 million worth of Bitcoin to their holdings. Historically, institutional investors scoop BTC off exchanges ahead of a meteoric price rise, based on the trend noted in 2016 before the bullrun.
In a recent interview with Jay Gould, a serial tech entrepreneur, Clemente explained how interesting it is to watch the current market dynamic. He said,
Long-term holders are buying harder than ever; they have bought almost 750,000 coins in the last month and a half or so; it's been pretty wild to see that kind of dynamic play out.
According to analysts, the current price trend in Bitcoin is a precursor of a "double bubble."
When new investors enter the market, they create additional liquidity, which triggers a surge in the asset's price. Traders may know the actual value of the asset based on their previous estimates. However, the flood of liquidity drives a price rally. The asset's newfound value exceeds the prior forecast, resulting in a "double bubble."
In his recent tweet, Charles Edwards, the founder of Capriole investments, a crypto fund, presented new evidence for the "double bubble."
New evidence for a #Bitcoin double bubble.
— Charles Edwards (@caprioleio) August 18, 2021
In prior cycle tops, bounces were never able to hold unrealized profit and loss above 0.5
Only the 2013 double bubble and today have achieved this.
Data: https://t.co/I5S3E37w8A (@PermabullNino) pic.twitter.com/23ZQOnOBil
Though institutional investors are bullish, retail traders are bearish on the current BTC price trend.
Simon Peters, a market analyst at trading platform eToro, observes,
The price has rebounded strongly now, but this upward move is showing some signs of short-term fatigue. We could see a small retracement down to lower prices before the prevailing trend reasserts itself.
Analysts at FXStreet agree with the bearish outlook and predict that a crash to the $15,000 level is likely. The current Bitcoin price action mimics previous cycles ahead of massive consolidation.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC declines as resistance emerges near all-time high
Bitcoin and Ethereum are approaching their key support levels, and a sustained close below these marks could lead to further declines.
TON set to launch synthetic Bitcoin to boost its DeFi solutions
TON revealed its plan on Thursday to launch a synthetic Bitcoin token on its blockchain, allowing users to trade, stake, and earn yield using BTC. Following the announcement, TON is down over 3%.
Maker Price Forecast: MKR could stage 40% rally
MakerDAO is up 2% on Thursday and could be set for a 40% rise in the coming weeks if it successfully maintains an extended move above the descending trendline of a falling wedge. On-chain data also supports the bullish outlook after a four-month-long decline.
USDT market cap crosses $120 billion as stablecoins continue their uptrend
The stablecoin market cap continued its uptrend in October, characterized by USDT reaching a $120 billion market cap, according to a CCData report on Thursday. This indicates that investors are preparing liquidity to fuel more demand.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.