Bitcoin is experiencing a “reset” in investor actions at the $30,000 marker and the trend will only need to keep going to lead to a price rise.
According to Bitcoin on-chain monitor Ecoinometrics this week, the only path for Bitcoin is “up” if hodlers keep buying in.
Looking at who purchased coins since the beginning of the recent bull run in Oct. 2020, Ecoinometrics showed that huge changes are afoot compared to 2020.
At the beginning, it was smaller investors who were buying. This started when Bitcoin went pass its last all-time record high of $20,000 and kept going to the new high at $64,500.
But at $20,000, bigger investors started selling, albeit not in large enough quantities to stop the bull run.
Whales added selling pressure after Bitcoin hit $30,000. The result, report analysts, was the tipping point for the month of May’s highs.
“$30k is a crucial level that prevent the continuing of coin accumulation by whales,” Ecoinometrics said.
The reason for selling pressure taking over might lie with whale beliefs that Bitcoin was getting “too high, too soon” and that the market was seen as unsustainable.
Now that $30,000 has come back, cold feet are gone — investors, both small and big, are getting back in again.
“Whales and smaller fish alike have begun accumulating while others have gone neutral,” the findings said.
“If this interpretation is right, then what we saw was a reset. Would this trend of accumulation, there is just one direction that Bitcoin can go and it’s up.”
That perspective gives a refreshing argument to the seemingly bearish tone that has taken over many investing commentators over the previous few weeks.
Even the traditional stock-to-flow price model has led to concerns about invalidation, something its creator says isn’t true, while on-chain activity has had low volumes and a lack of good support over $30,000.
Predictions for a major price movement higher are not in short supply, meanwhile, with new hopes for upward move lingering even with Bitcoin sliding under $32,000 on Wednesday.
Author: Blake Ambrose