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After an 18 percent drop last week, Bitcoin’s upward trajectory has been met with a lot of consolidation. However, as Bitcoin investors appeared hesitant to sell at a critical time amid expectations of a price increase, on-chain measurements provided an interesting glimpse into current market mood.
Some intriguing divergences in BTC’s supply dynamics raised a complicated question: Are they predicting bullish or bearish divergences? As a result, in order to grasp the cryptocurrency’s price trajectory, it is necessary to weigh bullish/bearish signs against market attitudes.
Post-halving blast still in the pipeline
Bitcoin to $100k is every holder’s dream and it would be apt to say that this dream might come true. The only question then is this – When? According to a Bloomberg report, there is a simple, yet logical way for Bitcoin to get to $100,000. After last year’s supply cut, the chances of BTC rallying are higher since post-halving years have seen the greatest price appreciation.
A 4x price increase might take BTC above $100k in the fourth quarter of 2021. Given its 55x gains in 2013 and 15x appreciation in 2017, this should not be a difficult task for the king currency. The only question is whether supply and demand conditions have worsened since the beginning of 2021, as compared to Bitcoin’s prior post-halving years.
Supply dynamics present a confusing picture
The continuation of extremely robust underlying demand could be pretty constructive for the price. Shedding light on the same, analyst Will Clemente recently pointed out that almost 93% of Bitcoin’s supply hasn’t moved in over a month.
This is an all-time high, one underlining the bullishness of BTC’s supply dynamics of late.
While this is a decent short-term bullish strategy, looking at HODL waves against the price appears to illustrate how the price has fallen with the commencement of a bear market after this trend reached an ATH. So, how does this bode well for BTC? And what’s different this time?
Notably, the volume of Bitcoin less than a month old just reached an all-time low of less than 7% of the circulating supply. This meant that the number of coins older than one month had reached an all-time high.
Historically, anytime BTC experienced a local low in nascent coins, three out of four occasions were preceded by full bull markets. On the contrary, one was the pre-bear run complacency rally of 2014.
The accompanying graphic depicts supplies divided down into age groups. According to the same source, the total amount of coins younger than one month is less than 7% of the 18.8 million BTC. Overall, these indicators appeared to be bullish in a Bitcoin market that was maturing.
Furthermore, a consistent increase in addresses with non-zero balances, despite a drop in price, is a positive indicator for the king coin. It appears like BTC is prepared for some severe moves — either BTC will pump like never before, or this is another one in four example.