Is there now a guaranteed profitable entry point for Bitcoin?
When talking about investing in Bitcoin, one of the most common topics is how or when investors start profiting and when to enter the market. While there are many factors to consider, it all boils down to one simple point: time.
When should you join, how long and what should you pay attention to beforehand
Investments can be examined in the next section.
Bitcoin investors are taking a break
After a while, BTC holders start giving out their stocks, this metric is gradually decreasing. The adjusted return-to-spend ratio (aSOPR) reached a two-month low on September 23, and a trend reversal can also be observed.
The index has been in the red for almost a month now. This is a sign that spending is falling on coins that are profitable and are now returning to HODL status.
aSOPR Bitcoin at 2-month low | Source: Glassnode
The last time the indicator slid to the above lows during a downtrend, the market saw the end of sell orders over a year old BTC supply. This sales trend has resulted in the supply bottoming out at around 54.2%.
As a result, investors are more optimistic this time around than they were in 2017, when supply bottomed out the last time. The discounts at both events are also about the same. This time, however, the number of bitcoins sold was 14% less.
Bitcoin supply more than 1 year age | Source: Glassnode
What does this mean for future investors?
Historically, the sales trend continued until the peak of macro formation and slowed down at the end of subsequent corrections. This year, sales continued until the macro highs of 2021 (May) appeared and stopped immediately after the corrections ended (July).
Since then, owners have been piling up, albeit more slowly than expected, as the trend has yet to accelerate. Even after this period, aSOPR gradually rose again until BTC hit a local high. Next, the price slid as the market corrected.
With yesterday’s 10% gain, it can be argued that the correction has completed and investors are returning to accumulation mode. In fact, the recent reduction in reserve risk also confirms this claim, as it indicates an attractive risk / return ratio for investments.
However, it’s worth noting that the PBoC’s recent crackdown on crypto trading and other activity resulted in the index plunging 6% in just 3 hours. It may be too early to determine the impact of this action on the indicators above.
Bitcoin Reserve Risks | Source: Glassnode
Even if the accumulation trend accelerates, it does not necessarily guarantee that the price will also rise. However, doing your own research is probably the best option right now, and the best time to profitably enter the market is when the market begins to stabilize again.
Glassnode co-founder Rafael Schultze-Kraft says on-chain data shows that Bitcoin is headed straight for a supply crisis. Brothers emphasize The data clearly shows that supply cannot meet demand
The latest data shows that nearly 2,000,000 BTC has switched from short-term to long-term holders since April of this year.
“Bitcoin offerings are gradually reaching long-term owners. From the peak of $ 65,000, nearly $ 2 million in BTC has moved from short-term to long-term holders. There will be insufficient supply to meet demand. Be patient, Hodl. “
Total supply of bitcoin held by short-term holders | The source: Glass knot
Glassnode defines a long-term owner as any user who has owned BTC for at least 155 days.
Analyst William Clemente is also working on new data on the delivery status of Bitcoin. According to him, the supply collapse rate (which is the amount of Bitcoin held by the “strong hand” versus the “weak hand”) is showing a bullish divergence.
Clemente noted that the current level of on-chain activity is similar to June and July, just before the largest digital asset by market cap skyrocketed in August.
At the same time, he noticed similar negative emotions in the replies to his tweets, which he sees as another positive sign of what is to come.
Bullish divergence between on-chain investor activity and price, just like June / July.
“On-chain is hopium” answers, just like in June / July. pic.twitter.com/mHa4JYXmMf
– Will Clemente (@WClementeIII) 09/22/2021
“P.bullish period between investor on-chain activity and price, as in June / July. The answers “On the chain is fictitious “ like june/July”.
Bitcoin is currently trading at $ 42,606 at press time, down 4.5% in the last 24 hours.
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According to AZCoin News