The market is maturing as Bitcoin sets new ATH

Bitcoin had a remarkably strong month when the price hit a new all-time high (ATH) of $ 68,641. This milestone was reached on October 20th after a long sideways movement since ATH. Along with the rise in prices, the market continues to show the strength of supply and demand. On the other hand, the activity in the chain seems to show confusing divergences.

BTC price 4-hour chart | Source: Tradingview

Despite the price that ATH has hit, BTC on-chain activity at press time is still only slightly above levels during the bear market. While that sounds bearish, it is in fact a sign that the BTC market is maturing.

So what’s next?

Supply dynamics are increasing price?

As Bitcoin approaches a new ATH, Long Term Holders (LTH) begin distributing it. Since the price fluctuated around 66,000 US dollars in the past 2 days, the offer held by LTH also reached a “HODL high”.

Since then, LTH has put 0.73% of the coin supply back into circulation. Accordingly, the highest intensity of selling pressure can be estimated from this group.

Providing profit / loss to short and long term owners | The source: Glass knot

In addition, the rate of accumulation of LTH reached over 400,000 BTC per month for about 5 months through the end of September, but has now returned to neutral levels.

In addition, the revived Supply Index (which tracks how many coins that are older than a year go back into liquid circulation) shows 6.5k BTC getting back to daily activity.

The revived Bitcoin offering was last active over a year ago | The source: Glass knot

Looking at the indicator, it becomes clear that this is a relatively low level compared to the Bull Runs of 2017, 2019 and 2021. Over the same period, over 20,000 BTC were revived per day. In fact, the current supply resurgence is similar to the spending pattern from late 2019 to 2020. The above period is mostly viewed as the end of the bear market.

In particular, the supply and demand side dynamics, which strongly influence current market characteristics, are still intelligent money accumulation. However, the market is approaching the transition from this phase to a phase of euphoria and hype like 2017 and Q1 2021.

BILLIONWhat’s next?

BTC’s transaction count remains well below its peak in the first half of 2021, while a modest upward trend is underway, with the number of new units reaching 11,000 per day. However, those numbers are barely above what was maintained during the 2019-2020 bear market with between 90,000 and 110,000 new units per day.

Number of new Bitcoin entities | The source: Glass knot

This hyperaccumulation trend, coupled with relatively less on-chain activity, shows that the BTC market is maturing.

As for the next targets for Bitcoin, BTC seems to be closely following the stock-to-flow pattern while observing the price structure. So it looks like it will live up to S2F’s predictions, closing November above $ 98,000 and hitting $ 135,000 by the end of the year.

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Minh Anh

According to AMBCrypto

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