The number of Bitcoin addresses with less than 1 BTC increased as the price of $ 69,000 was corrected by 30%.
Market analysis
Bitcoin (BTC) has seen a formidable rebound after falling on Jan.
The BTC price retracement came about mainly due to increased buying activity at addresses with less than 1 BTC. In contrast, Bitcoin wallets with balances between 1,000 BTC and 10,000 BTC did little to support the upward trend, as data collected by Ecoinometrics show.
“Bitcoin is still stuck in a situation where small addresses are ready to be stacked [the smallest unit account of Bitcoin]While whale addresses don’t really pile up, the newsletter focuses on cryptocurrencies notice after evaluating the change in the number of Bitcoin in small and rich wallet pools, as shown in the graph below.
Ecoinometrics goes on to claim that the situation is “not ideal” for Bitcoin, suggesting that without influential buyers, BTC price is likely to continue its downward momentum.
Ecoinometrics’ bearish outlook comes as Bitcoin faces the Federal Reserve’s policy decision on Wednesday to cut its bond purchases by $ 30 billion per month for a full cut next April.
The $ 120 billion per month stimulus plan was instrumental in bringing the BTC price down from under $ 4,000 in March 2020 to $ 69,000 by November 2021. And now, liquidity threatens to fade as lending becomes more expensive as the Fed prepares for three rate hikes over the next year, with many worrying it will hurt investors’ appetites for riskier assets like Bitcoin.
Bitcoin price surged above $ 49,000 shortly after the Fed’s FOMC meeting confirmed at least three rate hikes and some adjustments to current market support practices in 2022. https://t.co/TpTX7tGmYL pic.twitter.com/lXw47icZmB
– Cointelegraph Marketplace (@CointelegraphMT) December 15, 2021
Mike Novogratz, chief executive officer of Galaxy Digital Holdings, admits that Bitcoin may experience “short term pain” but predicts its price will not fall anywhere above the $ 42,000 support level.
The crypto billionaire told Bloomberg TV in an interview on Tuesday that “$ 42,000 is at pretty important levels and should hold the low 40s.”
“So much money is pouring into the room, it doesn’t make sense if the crypto prices fall way below that. If you stay long, you will feel pain, but it is probably healthy. “
In fact, unique wallets of greater than or equal to 1,000 BTC have steadily declined over the course of 2021, with data from Glassnode showing their number dropped from 2,475 to 2,147 as of Feb.2.
In contrast, the number of unique wallets with at least 0.01 BTC (about $ 485 at current exchange rates) increased from 8.46 million in 2021 to 9.39 million today.
Meanwhile, addresses with at least 0.1 BTC (~ $ 4,855) have risen from 3.12 million to 3.30 million over the same period, showing that “fish” are playing an important role in the price of Bitcoin this year from around $ 30,000 to as much as $ 69,000.
Further evidence that retail investors have been bullish on Bitcoin comes from addresses that hold at least 1 BTC.
Related: Analysts predict the bitcoin trend will change after the Fed releases the roadmap for 2022
These wallets decreased in number in the first half of 2021 as the BTC market struggled with the China ban and other negative news, but began to grow in the second half after El Salvador accepted Bitcoin as its currency.
The number of Bitcoin wallets with at least 1 BTC also increased during the BTC price correction from $ 69,000 to $ 42,333 during the November-December trading session, indicating an accumulation. It hit a seven-month high on Wednesday as Bitcoin rebounded from weekly lows near $ 46,000 to $ 50,000.
Also on-chain analyst Willy Woo Spot retail accumulation rose to levels seen after the March 2020 crash, leading to Bitcoin’s two-year bull run.
Additionally, Bitcoin’s momentum indicator prior to its breakout at $ 69,000 earlier this year also suggests a possible breakout in BTC price.
London, united kingdom, 22nd November 2024, Chainwire
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