06.10.202223:29 Forex Analysis & Reviews: Bitcoin: three on-chain metrics give a favorable signal

After several weeks of decline, the cryptocurrency managed to reverse the situation in its favor, adding more than 7% over the past week. At the time of writing the review, BTC was trading above the $20,000 level at $23,400 with a market capitalization of $387.4 billion.

Having gained a foothold above the level of 19,000, the main cryptocurrency is on its way to the resistance of 20,700, to which there is still a reserve of power.

Meanwhile, on-chain platforms are receiving data on favorable signals from metrics that can predict continued growth.

Bitcoin whales have reached the peak of savings

Cryptocurrency analytics platform Sentiment reports that bitcoin whales have accumulated positions strongly over the past nine days.

Since Tuesday last week, major players have added about $931,309,410 worth of BTC to their portfolios. This is the longest period of steady accumulation since May.

"Bitcoin whales are showing signs of steady accumulation, which was rare in 2022. Since September 27, addresses containing between 100 and 10,000 BTC have collectively added 46,173 BTC back to their wallets as large USDT [Tether] stocks have fallen."

Earlier this week, Sentiment noted that the supply of bitcoins on crypto exchanges has fallen to levels last seen in November 2018. According to experts of the analytical platform, against this background, the chances of a sell-off risk are further reduced.

Santiment is also exploring an Ethereum (ETH) Optimism (OP) scaling solution. According to the statements of the cryptanalytic platform, the activity of Optimism in the network is growing thanks to the layer 2 scaling solution, which recorded a record number of newly created addresses and daily active addresses.

"The activity of the Optimism network is growing, despite disappointing price indicators. The number of daily active addresses interacting on the network, as well as new addresses created, is at the highest level since the creation of the OP in May."

The pressure of bears has decreased

But the accumulation of whales is not all positive news for the main crypto currency. According to the market analytics platform, the amount of BTC stored in the public channels of the Lightning Network has reached a new high of 4,618 BTC, which is estimated at $93 million.

Not only that, but several other network indicators have also painted a positive picture for the cryptocurrency. Glassnode data showed that the outflow of BTC from exchanges has increased sharply over the past few days, which is a bullish signal.

Data from the CryptoQuant analytics platform showed that bitcoin exchange reserves continue to fall. This confirmed the view of lower selling pressure.

Moreover, the ratio of market value to realized value (MVRV) of BTC, along with volume, has also recently increased. This creates the prerequisites for sustainable growth in the coming days. However, some indicators indicated the opposite.

For example, net BTC deposits on exchanges were high compared to the seven-day average. This is a bearish signal confirming stronger selling pressure. Moreover, the reserve risk of BTC has also increased, which indicates that now is not the right time for active investments.

The loss of bitcoin supply has reached 50 for the first time%

The CryptoQuant analytics platform also shows an optimistic change in bitcoin metrics. So the latest report showed that the loss of supply for the main cryptocurrency for the first time in the current cycle was 50%.

One of the platform's analysts notes that bitcoin has probably reached a price bottom in this cycle, as evidenced by the assessment of previous data.

"Based on my analysis published on QuickTake, the lowest bottom of previous cycles always occurs when the percentage of supply loss reaches 50% or more. Now the highest percentage of losses was recorded at 52% according to daily data."

At the same time, the exchange inflow metric, a tool that combines spent coins into categories depending on their age, shows the capitulation of buyers who purchased the main cryptocurrency at a price above $30,000.

Miners are also likely to have reduced the size of their dumping positions. The Glassnode report showed that the distribution slowed down to about 4,500 BTC per month. This suggests that miners now have approximately 78,400 BTC.