A year-long price rally in Bitcoin (BTC) market and hopes of more bullish moves in the future have led traders to hold onto the token rather than exchange it for other assets, data from Glassnode shows.
The blockchain data analysis service revealed on thursday that the total amount of "accumulated or lost coins" reached a nine-month high of more than 7.21 million BTC. In simple terms, the Bitcoin metric reflected an increase in out-of-circulation tokens, those that may have been stored in cold wallets by long-term holders or that were lost due to human error, with minimal chance of recovery.
In simple terms, the Bitcoin metric reflected an increase in out-of-circulation tokens, those that may have been stored in cold wallets by long-term holders or whose private keys are lost forever for various reasons.
As a result, the total number of Bitcoin lost / pooled exceeded 34% of its total supply of 21 million tokens, making the cryptocurrency more scarce.
More evidence of a Bitcoin supply shock
Other data provided by CryptoQuant showed that the amount of Bitcoin reserves held across all crypto exchanges fell to its lowest level since August 2018 - 2.337 billion BTC on October 28, 2021.
Meanwhile, the Miners Position Index (MPI), which measures the proportion of BTC that leaves all miners' wallets at its 1-year moving average, has been stepping below zero since March 6, 2021, suggesting a strong buildup among miners.
"The amount of Bitcoins [owned by miners] it is at levels similar to those of May, when the price was below $ 40,000 ", indicated A CryptoQuant analyst like BTC tried to rally after falling below $ 60,000 on October 26, adding:
"You can easily see how early we are before the final bulls run."
What BTC price techs say
Bitcoin price correction from about $ 67,000 to $ 58,100 it appeared after the 60% rally in October. However, BTC / USD formed a parallel descending channel range (purple), increasing the chances of the structure being a bullish flag.
The flags of the bulls are bullish continuation patterns that send the price in the direction of its previous trend after a period of downward consolidation. In doing so, the technical indicator observes its targets to the upside at a length equal to the size of the previous uptrend, also known as the flagpole, once the price breaks above the flag's upper trend line with higher volumes.
The flagpole of Bitcoin is roughly $ 15,000 long. That means that the cryptocurrency could technically surge up to $ 15,000 from the breakout point. The Fibonacci levels on the chart above can function as floors to support a bounce to or above $ 70,000.
However, not all traders are convinced that the current setup is bullish in the short term.
"Some would say this is a bullish flag, and that's possible. But the volume characteristics point to a move lower from here most likely." commented pseudonym cryptocurrency trader Alex.
His fellow trader Pentoshi added that a break below the recent lows of $ 58,000 would be bad news for the bulls. He said:
"BTC off 58k per dollar What if this is a big bull flag and we are in a bull market where bull flags are broken? Now, in theory, the price should not go back to those lows or Bitcoin is in trouble 64k up to 29k backup of 29k with only 2 macro failures during that time. "
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trade move involves risk, you should do your own research when making a decision.
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