The countdown to the halving of Bitcoin in recent days it has been agitated by some erratic and violent price movements. Selling pressure between April 12 and 13 saw BTC fall approximately 14.5% from $70,900 on Friday to around $61,000, marking the low on Saturday. From a technical point of view in period preceding the halvingBTC has often shown a increase in volatility due to growth in volumes.
However, in the thirty days before the halvings the price always is kept stable, without significant downward movements. Only in the sixty days preceding the 2020 halving was there a sharp decline influenced by the panic caused by Covid-19.
Bitcoin and pre-halving movements
With reference to the price movements of Bitcoin last weekend, using the on-chain data provided by Glassnodewe can analyze some movements seen on crypto exchange.
Through the metric, “Bitcoin: Net Transfer Volume from/to Exchanges [BTC] – All Exchanges” it can be observed that the net deposits of BTC on exchanges were growing, as highlighted in the blue box.
Increase in BTC on exchanges
The data can also be analyzed with the metric “Bitcoin: Percent Balance on Exchanges” shown in the attached graph, which shows the trend from March 16th to April 10th. After a long decrease between 6 and 8 April, a increase in BTC available on exchanges of approximately the 4.5% reaching 2.306 million BTC. Currently this metric has started to fall again and is marking its mark lowest value at 11.673% BTC available on exchanges.
The data relating to BTC transfers to exchanges have relevance at the level of waring, as they indicate a tendency to make them available quickly for possible sales.
Open Interest Leverage Ratio drops slightly
Another relevant fact concerns the financial leverageobservable through the metric “Bitcoin: Futures Open Interest Leverage Ratio“. After reaching the highs in March, currently it is decreasing (orange line).
This is an important technical indicator on a financial level, since a high leverage ratio indicates that there is a large amount of outstanding futures positions, which represents a risk in terms of volatility for possible sudden and violent liquidations, especially in case of price corrections, which can be accentuated.
Sales of “young” BTC on addresses
In addition to the data relating to operations on exchanges, we also observe the metric “Bitcoin: Spent Output Lifespan” for periods between 3 months and 2 years with an average of 30 days. This metric essentially indicates the total amount of BTC spent from the outputs of on-chain transactions, considering those that have an age of 3 months to 2 years.
From the attached image, you can see that there was a increase in these movementsespecially on the wing from 3 months to 1 year, a sign that short-term traders and investors have seized the opportunity to take profits both in the price growth phase and in the current slowdown. Instead, the fuchsia line (1y-2y), shows that those who have held the longest have chosen not to slow down liquidations.
Trend of deposits on addresses from 10K to 10 BTC
In the attachment we report the trend of the “Addresses with Balance ≥ 10k up to 10 BTC“. The trend is varied, but we have highlighted it with a orange boxAddresses ≥ 1K (blue line) and 100 BTC (purple line) which show a constant growth. Addresses with more than 10K BTC (green Line) are currently 108 while the annual peak was 115.
Outlook on the current situation
Across the “Bitcoin: Short-Term Holder NUPL (STH-NUPL)” you can evaluate the unrealized profit or loss of short-term holders of Bitcoin. This indicator shows the difference between the current value of Bitcoins held by STHs and their aggregate acquisition cost. STHs are considered the category of holders more sensitive to movements and more inclined to speculation.
Historically, one downward trend in the NUPL of short-term holders (STH) is a sign that selling has often been motivated by sudden or even panic movements. At the time of writing of this article, the metric is declining in line with this observation. On the graph, the blue line highlights the STH-NUPL metric, in a downward phase that began in the first days of March. The current movement is in line with past scenarios highlighted with arrows.
Conclusions
The decrease in leverage and STH-NUPL, together with constant growth in address categories between 1000 and 10 BTC, are outlining a scenario which could be a phase of consolidation in the price of Bitcoin. This phase may still involve some corrective movements of the price, even rapid, but as long as there are no significant changes in the basic scenario, the long-term trend remains positive.
Tags: Bitcoin PreHalving Volatility Trends
