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Hodling Bitcoin is the Trend Once Again, according to Santiment

Bitcoin (BTC) has been on a mission to breach the all-time high (ATH) price of $41,500 it set recently. Nevertheless, it has been falling short of this objective because profit-taking tendencies by some investors have been pushing BTC downwards, as evidenced by its current price of $35,585 at the time of writing.

New data by Santiment reveals that dormant Bitcoin has been on the rise as the hodling culture comes to play. The on-chain data provider acknowledged:

“Hodling Bitcoin is becoming the trending strategy once again, after all-time highs were made repeatedly the past couple months. Dormant coins that were being moved during the sharp rise above $40k are now… back to being dormant.”

Hodling usually shows confidence on the part of investors as they await a price increase in the near future. Some crypto analysts like Michael van de Poppe have been serious advocates about holding Bitcoin because its price is still skewed upwards above the then ATH of $20,000 set in December 2017.

Bitcoin and Ethereum outdoing other Layer 1 blockchains

Even though Bitcoin’s market is in a consolidation mood after suffering a huge correction from around $40,000 to $30,000 last week and presently moving sideways around $35,000, it continues being a force to be reckoned with in the crypto space. Together with Ethereum, which breached its ATH price of $1,400 on Jan 19, they are outperforming other Layer 1 (L1) blockchains, according to CoinMetrics. The crypto-asset platform disclosed:

“Since the beginning of Dec. 2020 BTC and ETH have outperformed most other Layer 1 (L1) blockchains. Many of the assets that were launched as competitors to either Ethereum or Bitcoin have not been able to keep up during the current rally.”

Bitcoin’s current still waters seem to be running deep as institutional inflows continue trickling in overwhelmingly as Grayscale’s BTC portfolio recently stood at $23.69 billion.

Bitcoin Inflows Into Exchanges Hits a 5-Month Low

The Bitcoin (BTC) market has faced both highs and lows so far this year. After breaching the previous record of $20,000 in December 2020, the top cryptocurrency scaled to heights since a twelve-year journey after hitting $64.8k in mid-April.

Nevertheless, a sharp correction was imminent because it drove Bitcoin’s price to lows of $30k on May 19.

The dropping price on BTC had firstly slumped below the 200-day moving average (MA) since March 2020, due to the coronavirus pandemic caused a state of turmoil globally.

Bitcoin inflows into crypto exchanges have dropped to a 5-month low, as acknowledged by Glassnode. The on-chain metrics provider explained:

“Number of Bitcoin exchange deposits (7d MA) just reached a 5-month low of 2,518.137.”

A low uptick in exchange inflows signifies a holding culture because more users keep their cryptocurrencies in cold storage for speculative or future purposes.

The $30k level has become important for many investors

Yann & Jan, Glassnode co-founders, disclosed that the highest realized daily losses in Bitcoin history at $4.5 billion were recorded recently. They stated:

“Highest realized daily losses recorded in history. This shows how many investors support the 30k Bitcoin level. A coin realizes a loss if the price at its last movement was higher than the price of its current movement.”

Bitcoin was trading at $39k during the time of writing, according to CoinMarketCap. An analysis by CryptoHamster recently revealed that BTC ought to trade above the $34,000 level for a bullish divergence, creating a signal of the end of the latest downtrend.

With Bitcoin forming an inverse head & shoulder pattern with a target of $49,000 as alluded by market analyst Carl Martin, it remains to be seen whether this will signify a reversal pattern to the upside.

BTC also recently inched closer to the 200-day MA, and if it closes above this line, which shows the average closing price for the last 200 days or roughly 40 weeks of trading, then an uptrend is likely to be activated.

Bitcoin Eyes Settling $45 Trillion in 2021, Twice the Value of all its Previous Years Combined

By the end of the year, Bitcoin (BTC) is set to make the highest transfer volume of $45 trillion, a scenario not seen in its twelve-year journey.

Yassine Elmandjra, an analyst at ARK Invest, confirmed:

“Bitcoin is on pace to settle twice as much value this year as all of its previous years combined. Bitcoin annual settlement volumes are now ~4 times that of Visa’s and ~6% of the Fedwire.”

By settling a transfer volume of $45 trillion in 2021, Bitcoin will have doubled the value settled in its previous 11 years. This amount will also be four times of Visa transfers.

Therefore, it goes without saying that so far, 2021 has been a significant year for Bitcoin, irrespective of the hiccups witnessed. For instance, despite the leading cryptocurrency nosediving to lows of $28K in May as China intensified its crypto mining crackdown, BTC was able to defy the odds and scale to new highs of $69,000 earlier this month.

Furthermore, institutional interest in Bitcoin has gone a notch higher in 2021, as evidenced by MicroStrategy’s accumulation of more than 121,000 BTC.

Nearly 23% of BTC circulating supply has not moved for more than 5 years

According to crypto educational platform On-Chain College:

“The percentage of Bitcoin circulating supply that has not moved in at least 5 years continues to make All-Time Highs. Almost 23% of the circulating supply has been untouched for at least 5 years. More and more hodling from a macro perspective.”

Hodling is a preferred strategy in the Bitcoin market because coins are kept away from crypto exchanges in cold storage and digital wallets for future purposes. Therefore, this creates a supply deficit because they cannot be readily liquidated and if demand rises, the price increases.

On the other hand, based on the 30-day trend in crypto exchanges, BTC is leaving at a high rate. Furthermore, retail investors and short-term holders are selling to institutions and whales.

Bitcoin Funding Turns Negative amid 70% of BTC Circulating Supply Being Hodled

The weekend was characterized by a sharp decrease in the Bitcoin price after suffering a 20% drop prompting lows of $42K.

BTC funding flipped negative following long liquidations, according to on-chain analyst Dylan LeClair.

The change in funding rate was partly triggered by open interest to the tune of $5.1 billion was closing. Market insight provider Dilution-proof confirmed:

“$5.1 billion (23.4%) open interest was closed, sending the funding rate from moderately positive to firmly negative. The percentage of Bitcoin backed margin actually increased, which is unusual during such long liquidations.”

The massive liquidations in the Bitcoin market made December 4 the second-largest daily shed off in 2021 after a 50% price drop was witnessed on May 19.

At the time, Chinese authorities had started an intensified crackdown on crypto mining, which caught miners unawares. As a result, the price nosedived to lows of $30,000 from highs of $60K.

The situation was dire to the extent that Bitcoin price dropped below the 200-day moving average (MA) for the first time since March 2020. This is a key technical indicator that determines the general market trend because it shows the average of approximately 40 weeks of trading.

Nevertheless, the Bitcoin market has experienced sharp corrections in a bull run in the past. For instance, in the 2017 bull run, Bitcoin witnessed approximately six sharp corrections, with the highest hitting 38%.

Therefore, it seems that significant pullbacks are the norm in Bitcoin’s bull markets.

On the other hand, despite the notable correction witnessed over the weekend, the amount of BTC being hodled is high.

“70% of Bitcoin’s circulating supply is being hodled,” according to Glassnode co-founders Yann & Jan.

82% Ethereum Holders Still in Profitability Despite Price Slipping Below $4,000

Despite dropping below the psychological price of $4,000, 82% of Ethereum (ETH) holders continue being in profit, according to data by market insight provider IntoTheBlock.

ETH was down by 5.04% in the last seven days to hit $3,712 during intraday trading, according to CoinMarketCap.

This year, the second-largest cryptocurrency has made significant strides thanks to various use cases on its network. For instance, it scaled the heights and soared to historic highs of $4,850 last month.

Furthermore, Ethereum has yielded an annual return more than five times that of Bitcoin. ETH has a yearly return of 406% so far compared to Bitcoin’s 72.1%, according to CoinGecko.

Raoul Pal, the CEO and founder of Real Vision, opined that Ethereum has outperformed Bitcoin based on the burning mechanism and staking happening on its network. He explained:

“Burning + Staking + maintained volume is why ETH has outperformed BTC by 4x in 2021. But with no net real new capital flowing into the space, attention moves to other chains which also have PoS but earlier network adoption, taking volumes away from both BTC and ETH.”

The burning mechanism was introduced by the London Hard Fork or EIP 1559 upgrade in August, which has aided in reducing Ethereum’s annual inflation rate to 1.4%. Ethereum is burnt every time it is used in transactions, making scarcity inevitable.

On the other hand, the Ethereum 2.0 deposit contract launched in December 2020 made staking a possibility on the ETH ecosystem, given that it seeks to transit the current proof of work (PoW) consensus mechanism to a proof of stake (PoS) framework.

It is touted as a game-changer because Ethereum 2.0 full upgrade is expected to trigger a 1% annual deflation rate.

Bitcoin Hodlers’ Accumulation Continues, Ruble-Denominated BTC Volumes Hitting 9-Month High

Bitcoin (BTC) hodlers remain unfazed despite the leading cryptocurrency recently hitting lows of $34,000 as they continue accumulating more coins.

Data analytic firm IntoTheBlock explained:

“BTC hodlers continue to accumulate. The balance held by hodlers – addresses holding >1 year, increased by 4.13% over the past 30 days. 11.78m BTC belongs to these addresses.”

Source: IntoTheBlock

Market analyst Dylan LeClair also acknowledged that hodlers were not relenting on their quest to have more coins. He stated:

“Only 15.5% of the Bitcoin circulating supply has moved in 2022 despite rising levels of macroeconomic uncertainty. Hodlers are completely unfazed. Quite astonishing when you think about it.”

Source: Glassnode

Furthermore, BTC accumulation addresses have been going parabolic.

Source: Glassnode

Meanwhile, Ruble-denominated Bitcoin volumes are skyrocketing, given that they reached a 9-month high.

Source: Kaiko

Bitcoin’s ruble volume topped $16 million on Thursday, its highest level in 2022. On Monday, the total was about $8.5 million.

The Russian invasion of Ukraine has sparked interest in cryptocurrencies. Both Ukrainians and Russians are running to crypto to shield their money, with the Russian ruble has already lost a third of its value this year.

On the other hand, Bitcoin is forming a bullish engulfing candle weekly.

Source: TradingView

A bullish engulfing candle appears at the bottom of a downtrend and indicates a surge in buying pressure. The bullish engulfing pattern often triggers a reversal in trend as more buyers enter the market to drive prices up further.

Bitcoin was up 16.84% in the last seven days to hit $43,387 during intraday trading, according to CoinMarketCap.

Ethereum Needs to Hold $2,800 for Sustainable Bullish Momentum

With Ethereum being treated like a stone’s throw away from the psychological price of $3,000, its upward momentum continues to gain steam.

The second-largest cryptocurrency based on market capitalization was up by 22.21% in the last seven days to hit $2,911 during intraday trading.

Nevertheless, Ethereum needs to continue holding the $2,800 level for a sustainable upward trend. Market analyst Ali Martinez explained:

“On-chain data from IntoTheBlock shows that as long as ETH remains trading above $2,800, ETH has a good chance of recovering and advancing further because there is no major supply barrier ahead.”

Source: IntoTheBlock

On the other hand, a bullish sign continues to pop up, given that Ethereum has been leaving crypto exchanges in droves. Data analytic firm IntoTheBlock acknowledged:

“ETH has seen 7 days of consecutive outflows from exchanges. As the price increases, the supply available to buy from exchanges has been decreasing non-stop in 2021. Over 327,000 ETH left exchanges since Feb 22nd.”

Source: IntoTheBlock

Whenever cryptocurrencies leave exchanges, a holding culture is demonstrated because they are usually transferred to cold storage and digital wallets for future purposes. Therefore, this is a bullish sign because selling pressure gets tamed.

As Ethereum continues trading above the psychological price of $2,500, whether the $3,000 level will next remain to be seen.

Meanwhile, the much-awaited Ethereum’s proof of stake (PoS) consensus mechanism is deemed a game-changer that will prompt the adoption of energy-efficient technology. A recent review by the Massachusetts Institute of Technology (MIT) ranked Ethereum’s PoS among the top 10 technological breakthroughs of 2022.

Will Ethereum's Records Biggest Crypto Exchange Outflow in 2022 Propel More Upward Momentum?

Ethereum witnessed the largest crypto exchange outflow this year, given that coins exited in droves to the tune of more than 180,000 ETH.

Market insight provider IntoTheBlock explained:

“Largest Outflows in 2022 – over 180k ETH was withdrawn from centralized exchanges within a single day. The last time such a magnitude of ETH left exchanges was in Oct 2021, preceding a 15% price increase within ten days.”

Source: IntoTheBlock

Cryptocurrencies leaving exchanges signals bullish because it illustrates a hodling culture, given that coins are transferred to cold storage and digital wallets, reducing selling pressure.

Therefore, the massive outflows suggest that Ethereum is experiencing scarcity and this coupled with burnt Ether are bullish signs.

Since the London Hardfork or EIP-1559 upgrade went live in August 2021, the supply of Ethereum continues to be depleted based on the burning mechanism incorporated.

The non-fungible token (NFT) market has been making burnt Ether go through the roof. IntoTheBlock stated:

“NFT trading activity has been the largest burner of Ether since the introduction of EIP 1559 OpenSea activity alone has led to 230k ETH out of circulation. As NFT volumes peaked in January, Ether’s net issuance dropped to historic lows of nearly -2%.”

Ethereum is one of the sought-after networks in the NFT sector, which continues to take the world by storm.

ETH has been experiencing an upward momentum since the second-largest cryptocurrency surged past the psychological price of $2,500 observed on March 15.

With IntoTheBlock acknowledging that a 15% surge in Ethereum price was witnessed the last time massive crypto outflows were observed, it remains to be seen how things turn out this time around.

Bitcoin Miners’ Accumulation Has Been Consistent for Nearly a Year

Bitcoin (BTC) miners have adopted a strategy of consistently accumulating more coins for almost one year, according to market insight provider Glassnode.

Bitcoin miners’ accumulation has been on an uptrend since April 2021, with their cumulative balance sitting slightly below 1,825K BTC.

Source:Glassnode

This trend change among Bitcoin miners started in 2020 after they transformed into buyers and hodlers. This behavioural change might have been triggered by unprecedented factors like Bitcoin mining being unwelcome on Chinese soil.

For instance, more than 90% of China’s crypto mining capacity was lost after authorities disconnected BTC mining sites in Sichuan in June.

Hodling and accumulation have emerged as favoured strategies in the crypto space. Data analytic firm IntoTheBlock recently noted:

“As BTC soars to $42,000, more than 15,000 BTC in outflows from exchanges were spotted on March 21st, the largest since Jan 29th. The last time BTC experienced a large outflow, it was followed by a significant rise in price.”

Source:IntoTheBlock

Cryptocurrencies leaving exchanges signifies a hodling culture because coins are transferred to digital wallets and cold storage for future purposes rather than speculation. Furthermore, it illustrates a bullish sign based on reduced selling pressure.

With Bitcoin’s price being below the 200-day moving average(MA) longer than the big correction witnessed in 2021, it remains to be seen how the leading cryptocurrency plays out in the short term.

Source:TradingView

The notable correction in 2021 was prompted by the massive exit of crypto miners from China based on an intensified crackdown. As a result, Bitcoin nosedived from highs of $64,800 to lows of $30,000 in May 2021.

On the other hand, the 200-day MA depicts a market trend because it shows an average of approximately 40 weeks of trading.

Long-Term Hodlers Remain Unfazed, Despite Bitcoin’s Sentiment Hitting Rock Bottom

As Bitcoin (BTC) stagnates between the $29K and $30K levels, sentiment about the leading cryptocurrency has nosedived to levels last seen during the onset of the Covid-19 pandemic in March 2020.

Market insight provider Santiment acknowledged:

“Bitcoin’s sentiment is at rock bottom, indicating the amount of doom and gloom surrounding BTC and crypto in general is at its most negative since BlackThursday in March, 2020. Weak hands may continue to present opportunities for the patient.”

Source: Santiment

Nevertheless, this seems not to be dampening the spirits of BTC hodlers, who have accumulated for more than a year based on linear growth. Data analytic firm IntoTheBlock pointed out:

“Regardless of the recent price action, BTC hodlers have remained unfazed, as the linear growth continues. The number of holders (address holding >1year), is currently at an all-time high. There are now 27.65m addresses holding 12.66m BTC for more than 1 year.”

Source: IntoTheBlock

Bitcoin has been in the red for eight consecutive weeks. This bearish run has been fueled by Fed’s interest rate hike and the recent Terra crash.

As a result, the top cryptocurrency has been trading in the extreme fear zone based on the hiccups witnessed in the market.

On the other hand, various analysts have hinted that Bitcoin might be edging closer to bottoming out.

For instance, PlanB, the creator of the Stock-2-Flow (S2F) model, recently noted that the relative strength index (RSI) and realized price/moving average (RPMA) indicators had hit rock bottom, showing that the present bear market was almost over.

Moreover, market analyst Ali Martinez stated that BTC funding rates continued to be negative because short positions were dominant. Therefore, this was a positive sign for a rebound in BTC price.

Bitcoin was hovering around $29,188 during intraday trading, and it needs to hold the significant support level of $29K to increase its chances of a reversal.