Undistributed bitcoin outputs reaches a record high, then what?

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Bitcoin’s price has hit many new ATHs in a short time since it reached $20,000 in December 2020. The asset is now trading at $56,244, with a 5 percent gain in the last 24 hours and a 20 percent gain in the last week. Based on data from Glassnode, it is not just the price or market capitalisation that will touch new highs 2 days in a row. A lesser-known metric – BTC percent of UTXOs in benefit (7-day moving average) had a one-month peak of 99.967 percent.

This metric points out that the feeling is actually bullish, while the on-chain research signals the contrary. Check out the Bitcoin Active HODL wave chart to read between charts, as HODLing trends have shifted faster than in previous price rallyes.

Unspent Bitcoin outputs hitting new ATHs, what's next

Source: Woobull Charts

The HODL waves in the above chart reflect the shifting cross-section of Bitcoin kept in wallets grouped by the last time they travelled. Based on how waves have changed, particularly in the case of Bitcoin holding for 7Y days and less than 180 days, it is clear that the change has occurred since the price was over $30,000. When Bitcoin was rangebound, the HODLing trend began to change with more HODLed Bitcoins hitting exchanges, and new HODLing buyers hitting retail exchanges or cold wallets.

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Besides the bitcoin transfer deposited in exchange wallets, the bitcoin outflow from exchanges has risen and this signals a shortage of supplies. In addition to rising exchange outflows, it has been noted that steady coin inflows have also increased. In comparison to increased stablecoin inflows, bitcoin inflows to exchanges remained poor. This is fuelling a bullish narrative close to that seen in the last quarter of 2020.

It is expected that the HODL waves will be able to allow more transitions and that there will be more institutional investment inflows. MicroStrategy formally completed the sale of the convertible senior notes, and that $609 million will be used to purchase Bitcoin. Sustained demand generation from the institutional side will insure the price rallyes higher, and with more retail traders purchasing more than $50,000, there is a stronger likelihood that these purchases will be hoarded over the current cycle that will help Bitcoin sustain its price.

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