A new metric is in the Bitcoin news, showing that the situation with the coin is now almost identical to the historical run-up to $20,000 for the dominant coin. The new BTC dormant supply metric shows that 61% of the cryptocurrency’s supply has stayed in the same place for a year of even more – and the only time this happened was before its all-time highs.
Additionally, we can see that people who are holding Bitcoin are now preparing for a bull run just like the one which led to $20,000 all-time highs in 2017, as the metric suggests. The on-chain monitoring resource Glassnode on June 28 showed that the proportion of the Bitcoin supply that has not left its wallet now reflects the 2016 levels.
The last time we saw this amount of #Bitcoin that had not moved in over a year, was in early 2016 – preceding $BTC's bull run to $20k.https://t.co/lquCOcHXPX https://t.co/Hvf4lW72U6 pic.twitter.com/xGXYdqSewE
— glassnode (@glassnode) June 28, 2020
As many analysts noted, the new BTC dormant supply metric can mean a lot of things as well as nothing. Despite a hectic year for the coin, data now shows that over 61% of the supply remained dormant through the highs and lows. This represents a record, as the US crypto exchange Kraken and its business development director Dan Held added.
61% of Bitcoin hasn't moved in over a year.
That's an all-time high. pic.twitter.com/q9oYHYXdbc
— Dan Held (@danheld) June 28, 2020
In other reports in the cryptonews by Glassnode, the early 2016 period likewise recorded similar behavior among hodlers. According to them, the implication is that there is a reluctance to trade or sell, as well as a belief that it will be more profitable to save.
“The last time we saw this amount of #Bitcoin that had not moved in over a year, was in early 2016 – preceding $BTC’s bull run to $20k,” Glassnode summarized on Twitter.
The phenomenon of investment cycles in Bitcoin is often referred to as “HODL waves” and as we reported months ago, the data is now showing parallels. The BTC dormant supply metric could set the coin on the road to a new high this year.
However, all of this can also mean nothing. Many other indicators before pointed to a saving mentality which prevailed in Bitcoin. Currently, exchange reserves are at 13-month lows, while the signs of accumulation are now visible in wallets with both small and whale-size balances.
Reports from Glassnode earlier this year showed that 90% of the days were spent accumulating in the first half of 2020. Since the block halving in May 2020, however, the number of whales has increased by over 2%.
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