Bitcoin had a very eventful March, with its value plummeting to just over $51k in a matter of hours before returning to trade above its all-time high before the end of the month.
While this was anticipated, particularly given that most observers assume a move to $100k is unavoidable in 2021, the pace at which the bounceback was achieved demonstrated Bitcoin’s robustness as an asset, as well as the market’s belief in Bitcoin’s long-term potential beyond its most recent ATH.
Interestingly, Glassnode data highlighted a few main elements that could have contributed to Bitcoin’s current valuation. According to the results of the data-analytics website, long-term investors have now substantially slowed their investment, with hodled coins now maturing.
Furthermore, one may argue that a spike in outflows from exchanges suggests that accumulation is not slowing down, thus substantiating reports that Bitcoin might have enough bullish traction to cross the $80k price level by the end of this month.
Although price-based targets cannot be predicted with confidence, analysing a few primary market indicators can shed light on the prevailing sentiment surrounding BTC.
While a lot of BTC was amassed at the peak of the bull market, data suggests that these coins are now approaching a critical stage in their life cycle. Coins that have been aged or hoarded for more than 5-6 months, according to Glassnode, are likely to remain inactive and may be reclassified as a Long term holder (LTH) coin until their lifetime reaches 155 days. This is actually occuring in the BTC industry, and it is culminating in the formation of the so-called “next wave” of hodlers investing in the Bitcoin market.
Furthermore, the data shows that coins aged 1m-3m (accumulated in the orange zone) increased by +830k BTC, while coins aged 3m-6m (accumulated in the blue zone) increased by +394.5k BTC. This also backed the point that, considering a value of close to $60k, long-term investors are slow to sell their coins.
Furthermore, there has been a notable slowdown in LTH spending among the many investors who entered the BTC market when the price was well past its long-held ATH of around $20k, particularly after the first price dip of the year, during which BTC dropped from $42k to $29k.
Strong hodler sentiment has always helped the price, protecting it from sell-offs at local price peaks, and it is crucial if BTC is to meet its stellar price forecasts in the coming months. Given that Bitcoin is now seeing the emergence of a new generation of hodlers, its price is expected to rise significantly in the coming months.
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