An analytics firm has revealed that Bitcoin has historically tended to form tops and bottoms whenever this on-chain indicator spikes.
Bitcoin ‘Trader’ Supply Has Shown An Interesting Pattern With The Price
In a new on X, the market intelligence platform IntoTheBlock has discussed a pattern that the Bitcoin price appears to have followed in the past to the supply of the “traders.”
The analytics firm defines traders as short-term holders who bought their coins within the past month. Naturally, this market segment would represent the investors who are either new entrants or need more conviction to HODL for any significant period.
Statistically speaking, an investor’s age inversely correlates to their willingness to sell. The longer the holders keep their coins dormant in their wallets, the less likely they become to sell them at any point.
Thus, the traders being referred to here would be part of the market that’s the most likely to participate in selling (whether with the motive of profit-taking after a rally or because of panic after a crash).
Below is the chart shared by IntoTheBlock that shows the trend in the supply held by the investors belonging to this group over the entire history of the cryptocurrency.
It looks like the value of the metric has been relatively low in recent weeks | Source:
As displayed in the graph, the Bitcoin supply held by the traders had shot up earlier in the year when the asset’s price had marched to its all-time high (ATH), but it has since come back down to low levels.
In the chart, IntoTheBlock has highlighted the previous instances where the combined balance of this cohort showed a similar peak pattern. Such spikes have generally coincided with notable events in the BTC price itself.
“Historically, spikes in these holdings have consistently aligned with market peaks and bottoms, offering valuable signals for market timing,” notes the analytics firm.
The explanation behind this pattern may lie in the fact that any kind of trading activity on the network by any cohort ends up being registered in the supply of this cohort since coins get their age reset back to zero as soon as they become involved in a trade.
Thus, investors are making a lot of moves when the supply of the “traders” suddenly shoots up to high levels. In bull markets, the upward trajectory in the metric can correspond to new demand to absorb the profit-taking from the HODLers.
While in bear markets, the indicator’s spike generally comes from resolute hands participating in accumulation, thus helping the cryptocurrency’s price reach a bottom.
The Bitcoin trader supply has been showing an upward trajectory again recently. Still, the increase has been minimal, suggesting the asset may not be near the top or bottom.
BTC Price
Bitcoin has recently surged, with its price recovering above $64,000.
The price of the coin appears to have been moving sideways over the last few days | Source:
Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
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Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
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