The digital asset market continues to experience remarkably low volatility, with the classic 20-day Bollinger Bands showing an extreme squeeze.
With volatility near yearly lows, the uncertainty level has predictably risen.
All the #Bitcoin correlation narratives, according to Ecoinometrics, seem to be dead, too. It’s just not correlated to anything except crypto right now.
Well, maybe it’s worth a shot to turn to TA. What crypto Twitter hive brain can tell us?
(Source: The Wolf Den Substack)
Beneath the surface, however, on the on-chain side, capital is still flowing into digital assets at a steady and modest rate, measured by the Realized Cap (what’s this), according to the latest Glassnode’s weekly report.
Meanwhile, the blockchain analytics company IntoTheBlock revealed in a recent tweet that approximately 29% of the total circulating supply of Bitcoin is now considered lost forever, as it has remained inactive for over five years.
Not to say it’s an unambiguously healthy figure for an asset seeking mainstream adoption. Still, with obviously growing institutional demand, it certainly amplifies the potential supply shock, adding fuel to the expected bull run in the long term.
This aligns with Glassnode’s recent tweet about “hodled or lost Bitcoins.” According to them, this metric just reached a 5-year high of 7,781,224.168 BTC.
Bitfinex also reported that approximately 70% of BTC’s circulating supply has remained dormant for at least a year, the highest ever. And Long-Term Holder Supply remains at an ATH, according to Glassnode, suggesting mature investors prefer to accumulate Bitcoin rather than distribute.
78% of Bitcoin exchange inflows meanwhile are coming from short-term holders:
Closing on fundamentals, I’d like to point out another indicator from the same Glassnode report.
It’s uncommon for short-term holders to be more profitable than long-term in a healthy, strong market. Instead, such periods occur briefly in bearish trends, and their alternation has a clear pattern. Just take a look at the graph below (again, more detailed explanation can be found here).
So, despite all the uncertainty and possible reasonable correction in the short-term (see technicals above), fundamentally, the accumulation period at the beginning of a new long-term uptrend is still on the table. It just needs time to develop.
Accumulation doesn’t occur during a vertical price rise; distribution does.
U.S. Spot Bitcoin ETF Approval Clock to Start Wednesday as 8 Applicants Named on Federal Register.
Bonus: How Not To Suck At Trading
Tactical trading is hard. Risk management and position sizing are key. Without proper risk management and position sizing, you will suck at trading on a distance.
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