- BTC’s reserve risk indicator shows conviction among long-term holders, offering an appealing risk-reward ratio to existing or potential investors.Other indicators based on inactivity of supply also point to strong holding sentiment.
As a researcher, I’ve been monitoring Bitcoin’s “reserve risk,” a metric that reflects the long-term holder confidence by assessing their readiness to postpone spending coins. Remarkably, this risk indicator persists in the ‘green zone’ below 0.002, as per the data from CryptoQuant. The scale for this measure extends from 0 to 1.
Low readings indicate that long-term investors prefer to keep their Bitcoin instead of selling it at the current market price. This suggests a positive balance between demand and supply, making the investment scenario appealing with its promising risk-to-reward ratio for new or additional investments.
:format(jpg)/cloudfront-us-east-1.images.arcpublishing.com/coindesk/NUZUAQNLYNFSRH5YNLMOSVMQT4.png)
In simpler terms, the level of reserve risk usually moves in line with market upswings (bullish) and downswings (bearish). Historically, when the reserve risk is below 0.0027, it indicates a gradual shift from the last bear market phase to a bull market. On the other hand, readings above 0.02 have often signaled the peak of a bull market.
During this particular timeframe, other indicators indicate a resurgence of a holding approach following some profit-taking at all-time highs earlier in the year, as they suggest that a significant portion of the supply has become inactive.
During periods when the price of Bitcoin rises (bull markets), there’s usually an increase in sellers, as it encourages long-term holders to cash out some of their holdings. This trend can be seen by looking at the decrease in the Supply Last Active 1 year+ and 2 years+ metrics during March and April, according to Glassnode’s weekly report. However, recently, the pace of this decline has started to slow down, indicating a return to long-term holding (HODLing) among investors, which is typically more dominant in Bitcoin markets.
The continuous bullish signals from on-chain indicators align with the general belief in the market that upcoming interest rate reductions by the U.S. Federal Reserve could result in bitcoin breaking free from its extended price range of around $60,000 to $70,000, indicating a potential price surge.
Bitcoin changed hands at $64,420, a 0.3% gain over 24 hour, according to CoinDesk data.
Read More
- CKB PREDICTION. CKB cryptocurrency
- EUR INR PREDICTION
- PBX PREDICTION. PBX cryptocurrency
- IMX PREDICTION. IMX cryptocurrency
- TANK PREDICTION. TANK cryptocurrency
- BSW PREDICTION. BSW cryptocurrency
- ICP PREDICTION. ICP cryptocurrency
- GEAR PREDICTION. GEAR cryptocurrency
- ‘Starting 5’: LeBron James, Jayson Tatum and Jimmy Butler Among NBA Players Featured in Obamas-Produced Sports Series
- PENDLE PREDICTION. PENDLE cryptocurrency
2024-08-02 11:11