Bitcoin Long-Term Holders Remain Bullish Despite Consolidation

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Despite Bitcoin trading at a slight premium, long-term holders are showing an unwavering commitment to increasing their Bitcoin holdings. Interestingly, the Bitcoin Trend Indicator (BTI) reveals that the asset is currently positioned in the midst of a significant uptrend.

Bitcoin Trend Indicator Signals Significant Uptrend Amidst Consolidation

Long-term holders have experienced a steady upward trend in their 30-day change in Bitcoin supply since March 31. It’s worth noting that long-term supply refers to coins that investors have retained for a duration of 155 days or longer. This increase in supply suggests not only a buildup of dormant coins but also a prevailing bullish sentiment among these investors.

Long-term holders typically exhibit a tendency to refrain from spending their previous holdings, and the surge in this metric indicates their confidence in Bitcoin’s future prospects.

What makes this surge even more intriguing is the fact that Bitcoin prices have recently entered a phase of consolidation. This implies that Bitcoin holders perceive the temporary pause in price movement as an advantageous opportunity to accumulate more of the digital asset. Remarkably, year-to-date, Bitcoin prices have soared by an impressive 68%.

Adding further context, Bitcoin’s Network Value to Transaction (NVT) value currently stands at 57, surpassing its year-to-date average of 53.7 by 6%. The NVT ratio is a calculation obtained by dividing Bitcoin’s market capitalization by its transferred on-chain volume.

Comparable to the price-to-earnings ratio in equities, higher NVT levels often suggest that Bitcoin may be overbought, while lower values indicate potentially oversold conditions. In the present scenario, the close proximity to the average shows that the market is trading at a slight premium but maintaining relative equilibrium.

Additionally, the Bitcoin Trend Indicator is indicating a potential upward trajectory for Bitcoin’s price. This tool generates a daily signal that reveals both the direction and strength of Bitcoin’s price trend.

By utilizing a series of moving average crossover windows, the Bitcoin Trend Indicator provides one of five daily values, ranging from “significant downtrend” to “significant uptrend.” Currently, the BTI suggests that Bitcoin is situated in the midst of a significant uptrend.

Traders with a short-time horizon are likely to pay close attention to the fact that the BTI flashed the uptrend signal on April 28, following a period of decline that led to a neutral stance. Since that specific signal, BTC prices have experienced a 5% decline.

However, when considering the performance on a year-to-date basis, it becomes evident that the first uptrend signal for 2023 materialized on January 13. Since that date, BTC prices have witnessed a substantial 40% increase.

Overall, these observations depict a market where long-term Bitcoin holders are capitalizing on the slight premium in prices to bolster their holdings. The concurrent indications from the Bitcoin Trend Indicator and the NVT value suggest a favourable outlook, further fueling the optimism surrounding Bitcoin’s future price trajectory.

Bitcoin and Ether Decline at East Asia Trading, Binance Suspends Withdrawals

At the beginning of the East Asia trading day, Bitcoin experienced a 2.6% decline, trading at $27,715, while Ether saw a 1.4% decrease, reaching $1,850. The cause of Bitcoin’s network congestion, known as Ordinal-induced congestion, led to Binance suspending withdrawals on two occasions over the weekend.

During a recent appearance, Hany Rashwan, the co-founder and CEO of 21Co, expressed his concerns about the current state of Bitcoin, describing it as unprecedented in many years. He attributed this situation to the rise of BRC-20 meme coins. However, he emphasized the importance of distinguishing between meme coins and altcoins.

Rashwan clarified that altcoins like Ethereum or Solana should not be classified in the same category as meme coins. Altcoins serve as smart contract platforms, enabling a wide range of functions, including meme coins and NFTs.

To alleviate the congestion, Rashwan proposed that meme coin holders take profits and shift their investments to top altcoins and Ethereum. This shift, in turn, could potentially increase the value of these alternative coins.

However, Rashwan noted that such a transition would require a significant macroeconomic event to trigger it. For the time being, the market remains dominated by Bitcoin NFTs featuring the popular character PEPE.

In terms of market performance, there weren’t any gainers among the top cryptocurrencies, while the biggest losers included Terra (LUNA) with a negative return of 13.8%, Gala (GALA) with a decrease of 10.4%, and Decentraland (MANA) with a decline of 6.9%. These assets represent sectors such as Smart Contract Platforms and Entertainment.

In relation to Bitcoin’s recent obstacles, Paul Eisma, who holds the position of head of trading at XBTO Group, shared his perspective. He characterized the congestion resulting from meme coins as a natural part of the cryptocurrency’s development and expressed his unwavering belief in Bitcoin’s resilience, even amidst its recent downturn.

Eisma attributed these technical challenges to the Taproot upgrade, a privacy-focused improvement implemented towards the end of 2021, illustrating the ongoing evolution of the Bitcoin network. The professional acknowledged that Bitcoin has maintained a trading range of approximately $25,000 to $30,000 throughout this year. He compared the current phase of cryptocurrency to other early-stage technologies, explaining that such hurdles are a natural part of growth and evolution.

Eisma emphasized that the path of cryptocurrency development is not linear but rather a journey with ups and downs.

Looking ahead, Eisma expressed interest in the upcoming release of the May Consumer Price Index (CPI) and its potential impact on the monetary policies of the U.S. central bank.

The Federal Reserve has been gradually increasing interest rates by 25 basis points (bps) in recent times, and observers of monetary policy are eagerly awaiting signals regarding the Fed’s future stance.

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