Five key indicators show that when the demand for institutions is still very high, the main sellers will become the cheaters and even the accumulators of bitcoin again. This is an explosive setting that could send bitcoin to a record high in the near future.

Whales stop selling

The number of whales (with a balance of 1000 bitcoins or more) is a bitcoin address, down more than 10% since February 8, indicating a massive sell-off of bitcoin.

Although the price of bitcoin managed to reach two all-time highs during the two-month dumping period, the overall price rise has slowed down significantly, and BTC found strong resistance around $60000. But since March 31, big holders of bitcoin have stopped selling.

Number of addresses with balance equal to or greater than 1000 BTC

Portfolio Rebalancing at the end of the quarter is a typical time for selling. Since the beginning of this year, the price of bitcoin has risen 104%.

Grayscale, the largest digital asset manager, announced on April 6 that it had just rebalanced its digital market fund at the cost of selling bitcoin.

If rebalancing is the main driver, and given that the number of addresses holding 1000 BTC or more has returned to the level at the end of 2020 when prices began to rise (when whale prices began to rise), then whales can now be sold.

The long-term demand for selling bitcoin is slowing

When bitcoin broke through its highest price in 2019 in October 2020, it was considered one of the fastest and longest increases in the number of days of coin destruction (CDD).

The measure on the CDD chain represents the "weight" of long-term riders when they sell. It is calculated by multiplying the number of coins in the transaction by the number of days since they were last used. This means that the higher the CDD, the greater the sales.

However, since the beginning of this year, long-term traders' selling has not only slowed sharply, but has almost returned to the level that triggered the selling in 2020.

Bitcoin coin days destroyed, 21 day moving average

This shows that long-term traders are becoming more and more confident about the rise of bitcoin price in the short term.

The miners have become the accumulators of bitcoin

Since bitcoin miners' income stream is the newly mined BTC, they usually have to sell their mined BTC to pay for operating costs, such as electricity bills.

By blocking the sale of bitcoin, they became net accumulators. This is expressed as a measure of the change in the net position of the miner, which shows a 30 day change in the supply in the miner's address.

The last time miners hesitated to sell their bitcoin was nearly three months before prices soared. This positive change shows that miners expect higher prices in the near future.

Demand for institutions remains high

Despite the huge selling pressure, demand for bitcoin by institutions has not slowed down. The net transfer amount of bitcoin in and out of the exchange is in red, almost at a historical low, which means that the number of bitcoin currently extracted from the exchange is more than that deposited.

This indicates that the coins are being transferred to the freezer. For institutions, this is typical because they tend to make long-term investments and prefer safer custody solutions rather than leaving them on exchanges.

Since the advent of hubris, there has been a historic supply crunch in the balance of exchanged bitcoin. Since November 2020, this has become even more important as institutions begin to accumulate heavily.

This is very clear. Over the past few months, the balance of bitcoin on exchanges has continued to decline significantly, especially coinbase, which is often chosen by institutions.

Meanwhile, coinbase yesterday released its first quarter earnings and outlook, which states:

"Platform assets amounted to US $223 billion, accounting for 11.3% of the market share of encryption assets, including US $122 billion platform assets from institutions In view of the increased institutional interest in the crypto asset class, we expect significant growth to be driven by trading and custody revenues by 2021. "

Not only is it certain that financial institutions have substantially increased revenue, but the data also shows coinbase's confidence that this buying trend may not stop soon.

Weekly rise triangle close to breakthrough

Since the beginning of February, a rising triangle has been formed every week. Statistically speaking, it is more likely that the chart mode will break through upward than downward.

(2021-4-9)