Are three on-chain indicators optimistic that Bitcoin can hit a new ATH?

Bitcoin’s recent uptrend towards the previous all-time high (ATH) has many investors wondering whether bullish activity in the chain is leading to a positive macro outlook.

This article shows the indicators that position Bitcoin investors and their psychological implications, the surge in institutional activity and the shortage of supply on centralized exchanges.

97% of Bitcoin investors are Have words

The In / Out of the Money Around Price indicator shows the distribution ratio of addresses that bought Bitcoin in a certain price range. On the chart, there are price ranges in green that are below the actual market price of Bitcoin, while red areas mean that price ranges are above the market price. A larger circle within a certain price range means a greater concentration of addresses that have bought Bitcoin at the average price in that range.

When the current price in some option market conditions is higher than the average cost of the asset held at the address, it is said to be “in the money”.

Conversely, if the current price is below the average cost of the asset being held, these addresses are “out of the money”. When the current price finally approaches the previous average price, the address is “Am Geld” (break-even).

The source: IntoTheBlock

According to the graph above, Bitcoin is just below its all-time high and 5 million addresses (97.28% of the total) have an average purchase price below the actual market price, so they are profitable. The total number of addresses represents the number of investors. Based on behavioral economics theory, this is an optimistic sign as investors often continue to make investments by not selling and reducing losing investments.

In addition, this indicator can be used to identify key support and resistance levels, similar to volume configuration, a popular technical analysis indicator but with data in the chain. A larger circle means that a large number of buyers are concentrated around that price and can act as a barrier in the event of a price drop.

Many investors (928,000 addresses) bought in the $ 61,600 and $ 63,500 ranges. Hence, it could be a prop thanks to active buying at these prices.

Many transactions on the Bitcoin network come from institutions

The Average Trade Size Indicator shows the average daily number of US dollars traded on the Bitcoin blockchain. This indicator is calculated by dividing the value of all trades by the number of trades.

The source: IntoTheBlock

The fact is that the indicator is currently at an all-time high and growing, with the average Bitcoin transaction count hitting six digits. This implies that many of the transactions made on the Bitcoin network come from institutions. The first half of the year had a fairly stable average transaction size of around $ 250,000 to $ 350,000, but it has at least doubled since July, with an average of $ 550,000 to $ 650,000 and some highs of more than $ 2 billion recently.

The growing interest of institutional investors seeking exposure to Bitcoin is an optimistic sign given its rarity. The latest news of the successful launch of Exchange Traded Funds (ETFs) in the US market is the clearest evidence of the growth in institutional activity.

Investors buy Bitcoin on central stock exchanges much instead of selling

The net outflow indicator is calculated by aggregating the total Bitcoin inflow volume to each exchange address and subtracting the outflow volume from each exchange address into the user’s wallet. The net flow is positive when more money comes in than comes out of the stock market. In contrast, the net flow is negative when a larger volume of coins is withdrawn from the exchanges.

A positive net flow trend can be a sign that investors are cashing out as a large amount of coins are available for sale on the regular exchanges. Conversely, a negative net flow trend shows that investors bought them and amassed them by sending them to their own address rather than holding them at the address of a central exchange.

The source: IntoTheBlock

If you look at the graph, the previous weeks had very negative net flows, with a daily high of $ 2.68 billion. This shows that a large amount of coins are leaving the exchange to the personal address of the investor. This trend suggests accumulation and could ease the selling pressures that will arise if BTC breaks the ATH again.

Overall, the bullish indicators and recent positive macro view on Bitcoin do not point to any signs that could lead investors to switch from bullish to bearish later this year. While some altcoins will outperform Bitcoin, it continues to claim dominance, accounting for over 43% of the total crypto market, and is the first choice for many investors entering the space. , both for private individuals and for institutional or even countries.

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