CryptoQuant’s CEO Ki Young Ju today highlighted the similarities between Bitcoin market behavior in mid-2020 and its current state, which is marked by low prices with high activity on-chain. Young-Ju shared his insights via X and two charts, which illustrated the similarities between Bitcoin’s current state and mid-2050, a period marked by stagnant prices but high on-chain activity.
The first chart, representing data up until 2020, shows Bitcoin’s price alongside the realized cap for new whales – a metric that tracks the aggregate value at which the newly acquired Bitcoin by large investors was last moved. This is a new form of capitalization which assesses every UTXO based on the last price at which it was traded, not its current market value. This is a metric that reflects actual value realized by all coins within the network rather than the market value.
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Around mid-2020 this value increased dramatically, exactly when Bitcoins’ price fell into boredom, like it did in recent months. It was consistently trading near the $10,000 level. Young-Ju says that this time was marked by a high level of on-chain transactions, which later analyses revealed to be over-the counter (OTC), among institutions.
A similar pattern is evident in the second chart. It extends out to 2024 and shows an even stronger growth of the cap realized by new whales. Bitcoin has been moving sideways now for over 100 days. This chart shows a daily addition of $1 billion into the new whales. whale walletsThe term is used for addresses that hold large amounts of Bitcoin. These are often associated with high-capitalized individuals or institutions.
The Bitcoin price is now a lot higher.
Ki Young-Ju expanded on his observations. “Same vibe on Bitcoin as mid-2020. Back then, BTC hovered around $10k for 6 months with high on-chain activity, later revealed as OTC deals. Now, despite low price volatility, on-chain activity remains high, with $1B added daily to new whale wallets, likely custody.”
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The tweet he referred to was from September 2020 and it confirmed his findings. “number of BTC transferred hits the year-high, and those TXs are not from exchanges. Fund Flow Ratio of all exchanges hits the year-low. Something’s happening. Possibly OTC deals.”
The comparison, as well as the high realized cap level for the new whales, suggest that large investors are in a phase of accumulation. This is similar to the activities observed at the beginning of 2020. Such movements tend to be hidden on crypto exchanges. They indicate strong institutional interests that may presage significant market movement. BTC’s price soared 480% between September 2020 and November 2021 after Young-Ju tweeted.
It remains to be determined if a similar movement is in the works for Bitcoin, but it’s clear that its price has been steadily rising. Bitcoin holdings New whales and sustained prices levels indicate a possible buildup of tension beneath the surface of the market. Such conditions, as we have seen in the past may result in substantial price changes once Bitcoin accumulates and begins to affect the market via increased liquidity or renewed interest.
BTC is currently trading for $68,271.
Featured image created with DALL·E, chart from TradingView.com
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Source: www.newsbtc.com