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HODLing Rewards: Average Bitcoin Long-Term Holder Now Carries 55% Profit

On-chain data shows the Bitcoin long-term holders (the so-called HODLers) are now carrying an unrealized profit of 55% on average.

Bitcoin Long-Term Holder NUPL Has Hit A Value Of 0.55

According to the latest weekly report from Glassnode, the profit that the BTC long-term holders are holding has gone up recently. The indicator of interest here is the “Net Unrealized Profit/Loss” (NUPL), which keeps track of the difference between the unrealized profit and loss that Bitcoin investors are carrying currently.

By “unrealized,” what’s meant here is that the profit or loss is yet to be harvested, as the investor carrying it hasn’t transferred their BTC on the blockchain yet. Once the holder would eventually move the coins, the profit/loss they were holding would then become “realized.”

In the context of the current discussion, the NUPL of only a specific segment of the market is of relevance: the long-term holders (LTHs). The LTHs are the Bitcoin holders who have been keeping their coins dormant on the network since at least 155 days ago.

These are the diamond hands of the market who are known to hold through periods of uptrends and downtrends alike, only selling when major market events take place.

“This includes periods when the market sets new ATHs, around cycle tops and bottoms, and during large shifts in market structure (e.g. Mt Gox, Halvings, and now the launch of spot ETFs),” explains the analytics firm.

Now, here is a chart that shows the trend in the Bitcoin LTH NUPL over the history of the asset:

Bitcoin LTH NUPL

As displayed in the above graph, the Bitcoin LTH NUPL has registered a rise in the last couple of months as the cryptocurrency’s spot price has gone through a notable surge.

“This metric reached 0.55 this week, which is meaningfully positive, and puts the average long-term investor at a 55% unrealized profit,” notes the report. Interestingly, BTC has registered some resistance around this level during the past.

As Glassnode has highlighted in the chart, the bulls encountered trouble here during August 2012, June 2016, July 2019, and August 2020. In all of these cases, the resulting top was only a local one, except for July 2019, where the recovery rally of the cycle hit a top that BTC wouldn’t surpass for a significant period of time.

Generally, investors in profit are more likely to sell their coins. The higher the gains that they hold, the stronger can be the allure of profit-taking. Thus, it’s not surprising to see that the LTHs holding significant profits has lead to selling pressure in the market during previous cycles.

The LTHs have indeed participated in some selling recently as well, as the data for their supply suggests.

Bitcoin Long-Term Holder Supply

The Bitcoin LTH supply has now come down 75,000 BTC since the all-time high registered in November, while the opposite cohort, the short-term holders (STHs), have naturally gained some share.

“Whilst 75k BTC is a meaningful sum, it should also be viewed within the context of total LTH supply accounting for a whopping 76.3% of the circulating coin supply,” says the report.

BTC Price

Bitcoin has continued its recent sideways trend during the past day as its price currently floats around the $42,600 level.

Bitcoin Price Chart

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SUI Overtakes Bitcoin, Aptos To Become 13th-Largest DeFi Network

The SUI blockchain has been ramping up since the year 2024 began, and a natural consequence of this rapid growth is that it has now surpassed some major players in the decentralized finance (DeFi) space. This has put it ahead of heavy hitters such as Bitcoin and Aptos as SUI begins to leave its mark on the market.

SUI Network TVL Crosses $360 Million

The total value locked (TVL) on the SUI network has completely exploded in the last year. The total value locked on the blockchain was sitting at less than $12 million in the middle of 2024. But now, less than a month into the year 2024, the TVL has already crossed the $360 million mark.

While this figure is still far off from the likes of Ethereum and BSC which continue to dominate the DeFi TVL, it puts it ahead of some heavy hitters in the game. For example, the Bitcoin TVL is currently sitting at $298.8 million, which means SUI TVL is much higher than that of Bitcoin.

Then again, another network which is currently lagging behind SUI is the Aptos TVL. The Aptos blockchain, which was launched to much fanfare back in 2022, is sitting at a TVL of $133 million. This means that SUI’s TVL is more than 2x higher than that of Aptos.

Other DeFi networks which SUI has surged ahead of include the likes of Kava at a TVL of $251 million, Near at a TVL of $94 million, and Metis at a TVL of $124 million. With its TVL figures, SUI is now the 13th-largest DeFi network.

SUI price chart from Tradingview.com

DeFi Making A Comeback

After a long stretch of poor performance, the DeFi market looks to be making its comeback in 2024. As DeFiLlama data shows, after the market peaked at a TVL of almost $245 billion in 2022, it dropped more than 50%, spending the majority of 2023 trailing below $70 billion.

However, as crypto market sentiment has improved, so has the DeFi TVL. The TVL has grown from its October 2023 lows of $47 billion to more than $72 billion so far in 2024. This is as a result of the likes of SUI gaining more adoption and their token prices also increasing.

As expected, Ethereum dominates the majority of this TVL, currently sitting at $43.743 billion. The Tron and BSC networks are the second and third-largest, with TVLs of $8.14 billion and $5.41 billion, respectively.

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Bitcoin ETF Makes Waves: Volumes Surge $10 Billion 3 Days

Bitcoin Spot Exchange-Traded Funds (ETFs) have once again garnered the attention of crypto enthusiasts and investors as the products have witnessed a whopping $10 billion in total trading volume in the first three days of trading.

Bitcoin Spot ETF Sees Significant Uptick In Day 3 Trading

The development was revealed by Bloomberg Intelligence analyst James Seyffart on the social media platform X (formerly Twitter). The information shared by the analyst demonstrates a firm desire for exposure to digital assets via regulated financial markets.

Seyffart’s X post delves in on the data from the “Bitcoin ETF Cointucky Derby.” According to the analyst, “ETFs traded almost $10 billion in total over the past 3 days.” 

The analyst also provided a virtual record of the data to further elaborate on the substantial trading volume. With a total volume of over $5 billion, Grayscale Bitcoin Trust (GBTC) stands out as the top performer among the notable financial firms.

BItcoin

Meanwhile, iShares Bitcoin Trust (IBIT) and Fidelity Wise Origin Bitcoin Fund (FBTC) come next in line. The data shows that the financial firms witnessed an overall trading volume of $1.997 billion and $1.479 billion, respectively. 

ARK’s 21Shares ETF (ARKB) and Bitwise Bitcoin ETF (BTTB) followed behind with a substantial total trading volume of $568 million and $258 million, respectively. This spike in trading volume indicates that both institutional and individual investors are growing more at ease utilizing traditional investment engines to trade BTC.

Although Grayscale’s Bitcoin fund continues to gain the highest overall trading volume, the fund has seen significant withdrawals from investors seeking to lower their exposure.

There have been withdrawals totaling more than $579 million since Grayscale started trading on January 11. Currently, Grayscale is still considered the “Liquidity King” of the Bitcoin spot ETFs.

However, Bloomberg analyst Eric Balchunas anticipates that Blackrock might oversee Grayscale to claim the title. “IBIT keeping lead to be one most likely to overtake GBTC as Liquidity King,” he stated.

3-Day Trading Surpassed 500 ETFs In 2023

Following the report, Eric Balchunas has provided a context for the massive surge of these products. The analyst did so by comparing the trading volume of BTC ETFs to all the ETFs that were launched in 2023.

“Let me put into context how insane $10b in volume is in the first 3 days. There were 500 ETFs launched in 2023,” Balchunas stated. According to him, the 500 ETFs completed a $450 million combined volume today, and the best one did $45 million.

In addition, Balchunas highlighted that Blackrock‘s BTC ETF demonstrates a better performance than the 500 ETFs. “IBIT alone is seeing more activity than the entire ’23 Freshman Class,” he stated. It is noteworthy that half of the ETFs launched in 2023 recorded an overall trading volume of “less than $1 million” today.

Balchunas also stressed the difficulty in acquiring volume, noting that it is harder than flows and assets. This is because the volume has to come genuinely in the marketplace, which gives an “ETF lasting power.”

Bitcoin

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Grayscale Bitcoin ETF Bleeds: Traders Make $579 Million Run On The Fund

Grayscale, an American digital asset management company, has witnessed a staggering amount of outflows in its Spot Bitcoin ETF, Grayscale Bitcoin Trust (GBTC). Analysts speculate that the outflows may be linked to several factors, including high trading fees and accounting irregularities. 

Grayscale Experiences Massive Outflows

After successfully securing approval for its Spot Bitcoin ETF against the United States Securities and Exchange Commission (SEC), Grayscale experienced steady inflows in its GBTC. However, recent reports suggest that the company’s gains may have been premature, as Grayscale’s GBTC recently experienced a significant outflow of approximately $594 million. 

According to James Seyffart, a Bloomberg Analyst on X (formerly Twitter), Grayscale has encountered total net outflows of $1.173 billion for its Spot Bitcoin ETF. 

Seyffart presented a screenshot of a spreadsheet detailing the cumulative inflows and trading volumes witnessed by various Spot btc ETF companies, including Bitwise, ARK/21 Shares, VanEck, and more. The analyst revealed that while many of these companies saw large amounts of inflows, the gains were not sufficient enough to offset Grayscale’s substantial outflow of almost $600 million. 

Seyffart suggested that Grayscale’s lagging outflows may be a result of T+1 accounting and settlement processes causing outflows from previous days to be reflected in recent data. On the other hand, an X user has published a scathing critique on Grayscale, stating that the crypto asset management company may continue to experience a massive exodus of shareholders due to its exorbitant ETF fees. 

Several investors may have shifted towards more affordable Spot Bitcoin ETFs, as GBTC’s ETF has an expense ratio of 1.5%, making it the most expensive Spot Bitcoin ETF in the United States. 

When asked by an X user why there were heavy outflows in Grayscale’s Spot Bitcoin ETF, Senior Bloomberg Analyst Eric Balchunas stated:

“A lot of traders came in to play the discount closing so they left to take profits, there are also captive average investors who may have decided to stomach the tax hit in order to flee the 1.5% fee, I’d expect more over time.”

Bitcoin price chart from Tradingview.com (Grayscale Spot Bitcoin ETF)

Spot Bitcoin ETF Records $10 Billion In Trading Volume

The crypto market’s recent response to the increased levels of trading activities in Spot Bitcoin ETFs has been remarkably positive. 

Seyffart shared in a post on X that Spot Bitcoin ETFs have achieved an impressive trading volume of almost $10 billion in just three days. This massive trading activity underscores the growing interest and positive shift in investor sentiment regarding Spot BTC ETFs. 

In a similar vein, Balchunas disclosed that several recently launched Spot Bitcoin ETFs had seen significant inflows totalling $1.4 billion. Leading the group, iShares Bitcoin Trust (IBIT), the Spot Bitcoin ETF of BlackRock, has secured the top spot with half a billion in inflows, followed by Fidelity in second place ahead of other ETFs. 

According to Balchunas, all 500 ETFs introduced in 2023 have accumulated approximately $450 million in volume, indicating a promising upward trend for the Spot Bitcoin ETF market.

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The Grayscale Effect: The Bitcoin Price Has A New Prime Trading Hour

The crypto trading landscape is witnessing a paradigm shift with the recent introduction of spot Bitcoin ETFs in the United States, catalyzing a new wave of trading dynamics. Bloomberg analyst James Seyffart revealed that the total trading volume of the US spot Bitcoin ETFs over a span of the first three days approached the $10 billion mark.

This substantial volume was predominantly led by Grayscale’s GBTC, with a three-day trading volume amounting to $5.174 billion, followed by BlackRock’s IBIT at $1.997 billion, and Fidelity’s FBTC at $1.479 billion, cumulating to an aggregate trading volume of approximately $9.771 billion.

Despite these impressive figures, Bitcoin’s price performance has not mirrored the trading volume’s growth, a phenomenon analysts attribute to a strategic pivot among Grayscale’s clientele. Investors are increasingly transitioning their capital from Grayscale’s GBTC, with its 1.5% annual fee, to more cost-effective spot BTC ETFs, some offering fees as low as 0.25%.

This shift, however, is not seamless due to the cash-redemption process prescribed by the Securities and Exchange Commission (SEC). Consequently, investors find themselves navigating a temporal gap, redeeming cash and reallocating it to other spot BTC ETFs, typically a few days later.

Understanding The Grayscale Effect On Bitcoin Price

This operational characteristic of Grayscale’s GBTC, which does not facilitate same-day cash redemptions for BTC and operates on a T+2 or T+1 settlement basis, has given rise to a discernible trading pattern. Alex Thorn, Head of Research at Galaxy, provided insight into this phenomenon, stating:

We’re seeing significant Bitcoin trading volume now during US hours, particularly between 3-4pm NY now during the ETF fix, escalating into what has lately been a predictable Grayscale dump into the close. The game is evolving.

Echoing this sentiment, Daan Crypto Trades observed a consistent pattern in Grayscale’s operations, highlighting, “Grayscale is sending X amount of Bitcoin to Coinbase ~1 hour before the market opens every trading day. Will be a good indicator to gauge how bad the outflows of GBTC are I think. 4K BTC was sent Friday. 9K BTC was sent [Monday].”

Further substantiating these observations, Maartunn from CryptoQuant remarked on the tangible outflow of Bitcoin from Grayscale’s fund, particularly to Coinbase, stating, “Data doesn’t lie, as seen once again. Shortly after the inflow of Bitcoin from Grayscale to Coinbase, the Coinbase Premium Gap, previously positive, turned negative for the first time this year, indicating strong selling pressure from Coinbase.”

He emphasized the correlation between these events and the increased trading volume on Coinbase, especially during the trading hours of the American stock market.

Crypto analyst James Van Straten further detailed the pattern of Grayscale redemptions to Coinbase Prime, noting, “We’re starting to see a pattern of Grayscale redemptions to Coinbase Prime just before the market opens. 9k Bitcoin ($387M) sent to Coinbase Prime all before 2:30 (GMT) on Jan 16. On Jan. 12, 4k Bitcoin before the market opened.”

As these patterns continue to manifest and evolve, the Grayscale effect is evidently reshaping the prime trading hour for Bitcoin, introducing a new layer of complexity and strategy in the crypto trading arena. Importantly, the Grayscale selling pressure will not last forever, but as long as it exists, it could continue to put some pressure on the Bitcoin price.

Until then, following the Grayscale flows could be crucial for determining BTC price trends. Grayscale still holds circa 587,000 to 617,000 Bitcoin, depending on the data provider.

At press time, BTC traded at $42,754.

Bitcoin price

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Bitcoin Price Signals Recovery But The Bears Are Not Out of Woods Yet

Bitcoin price is still struggling below the $43,500 resistance zone. BTC could start a recovery wave if there is a clear move above the $44,000 resistance zone.

  • Bitcoin price started a consolidation phase from the $41,500 zone.
  • The price is trading above $42,500 and the 100 hourly Simple moving average.
  • There is a key rising channel forming with resistance near $44,000 on the hourly chart of the BTC/USD pair (data feed from Kraken).
  • The pair could start a decent recovery wave if there is a move above the $44,000 resistance zone.

Bitcoin Price Faces Hurdles

Bitcoin price found support near the $41,500 zone and recently started a consolidation phase. BTC was able to recover a few points above the $42,000 and $42,200 levels.

The price even spiked above the 23.6% Fib retracement level of the main decline from the $49,000 swing high to the $41,475 low. There is also a key rising channel forming with resistance near $44,000 on the hourly chart of the BTC/USD pair.

Bitcoin is now trading above $42,500 and the 100 hourly Simple moving average. If the bulls remain in action, the price might recover above the $43,250 resistance. The first major resistance is $44,000 or the channel trend line.

Bitcoin Price

Source: BTCUSD on TradingView.com

A clear move above the $44,000 resistance could send the price toward the $44,450 resistance. The next resistance is now forming near the $45,250 level. It is near the 50% Fib retracement level of the main decline from the $49,000 swing high to the $41,475 low. A close above the $45,250 level could push the price further higher. The next major resistance sits at $47,000.

Another Decline In BTC?

If Bitcoin fails to rise above the $44,000 resistance zone, it could start a fresh decline. Immediate support on the downside is near the $42,800 level or the 100 hourly Simple moving average.

The next major support is $42,120. If there is a close below $42,120, the price could gain bearish momentum. In the stated case, the price could drop toward the $41,500 support in the near term.

Technical indicators:

Hourly MACD – The MACD is now losing pace in the bearish zone.

Hourly RSI (Relative Strength Index) – The RSI for BTC/USD is now above the 50 level.

Major Support Levels – $42,800, followed by $42,120.

Major Resistance Levels – $43,250, $44,000, and $44,450.

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Crypto Think Tank Rebels Against This US Senator, Here’s Why

On December 18, 2023, US Senator Elizabeth Warren sent three letters to the Coin Center Director Jerry Brito, Blockchain Association CEO Kristin Smith, and crypto exchange Coinbase. The senator set January 14, 2024, as the deadline for a response to her inquiries.

In the letter addressed to Brito, Senator Warren voiced her concern over reports that his organization and “other crypto interests” were “flexing a not-so-secret weapon” by amassing what she considers a “small army” of former ex-government officials.

A “Patriotic” Response To “Unconstitutional” Demands, Crypto Think Tank Firesback

Coin Center, a non-profit think tank focusing on the policy issues faced by the crypto industry, sent the US Senator a response letter on January 15. The organization stated:

With respect, we have no obligation to answer these questions beyond the public disclosures we make under the law.

Coin Center affirms that it takes constitutional rights seriously and considers that “free speech and petitioning the government are fundamental rights protected by our constitution,” Warren’s letter “discourages participation in important public policy debates and chills these rights.”

Regarding its opposition to legislative proposals, such as the CANSEE Act and the Digital Asset Anti-Money Laundering Act, the letter cited Coin Center’s belief that they are “unfair, unworkable, and most importantly, unconstitutional” efforts, as well as a “waste” of time and energy that could be spent on reinforcing existing laws.

The organization believes that its “proper” and “patriotic” opposition to these legislative efforts for “unconstitutional and draconian” surveillance is being mistaken as “political bias” by the US Senator.

Coin Center: “The Abuse Of The Revolving Door”

Warren’s letter highlighted the “gaps” that allow former government officials to leave their positions and “cash in and go to work as lobbyists or advisers for private-sector industries with a keen interest in federal policy.”

The Senator inquired Coin Center’s Head about this gap, asking Brito to provide a list of former government officials employed by the crypto think tank and details about their responsibilities, economic compensation, and whether they had been contacted about employment before leaving their former position.

Per the list and details of former government officials currently employed by Coin Center, the organization “politely declines” to offer further answers but is open to a conversation with Senator Warren.

We welcome honest, respectful policy discussions and are happy to meet with you or your staff to discuss further.

Coin Center criticizes the senator for the existence of said gap, noting that “if a gap exists, it is in enforcement”, and calls out the lack of effort on “securing more funding for FinCEN, the FBI and DOJ’s crypto enforcement units, and the like.”

The organization affirms that its efforts to find solutions and support sound regulation for cryptocurrency businesses will continue, including Congress’ effort to address the role that cryptocurrencies play in financing terrorist organizations, as Coin Center believes that sound policymaking is only possible when “diverse voices and perspectives are welcome and engaged.”

The Coin Center Executive Director concluded:

As for bipartisanship, we are proud of the work we have done to find solutions that advance sound regulation for cryptocurrency businesses while preserving the freedom to innovate.

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Grayscale Transfers Almost 12,000 BTC To Coinbase, Bitcoin Price Reacts

In a significant development that could potentially impact the Bitcoin price, Arkham Intelligence data reveals that Grayscale, the manager and owner of the Grayscale Bitcoin Trust (GBTC), has been sending a significant amount of Bitcoin to Coinbase since the launch of Bitcoin spot exchange-traded funds (ETFs) on January 12.

Grayscale Bitcoin Trust Initiates Substantial BTC Outflow

According to the data, four days ago, Grayscale initiated the first batch of BTC outflows from their holdings to the US-based exchange in four separate batches, totaling 4,000 BTC, which amounted to approximately $183 million. However, the asset manager resumed outflows from the Trust to the exchange on Tuesday.

Bitcoin price

In a recent update, approximately three hours ago, the asset manager sent an additional 11,700 BTC to Coinbase, amounting to $491.4 million. This additional selling pressure could push the Bitcoin price to test lower support levels.

Furthermore, Bloomberg reports that investors have withdrawn over half a billion dollars from the Grayscale Bitcoin Trust during the initial days of trading as an ETF. 

According to Bloomberg’s data, outflows from the Grayscale Bitcoin Trust reached approximately $579 million, while the other nine spot Bitcoin ETFs witnessed inflows totaling nearly $819 million.

Investors Shift Capital To ‘Lower-Cost’ Spot Bitcoin ETFs

James Seyffart, an ETF analyst at Bloomberg Intelligence, noted that investors may be profit-taking following the ETF conversion. The flow data provides valuable insights into the ETF’s performance following SEC approval. 

Although over $2.3 billion of GBTC shares were traded on its first day, the outflows indicate that a portion of that volume was due to selling. Seyffart anticipates that a significant amount of capital will enter other Bitcoin exposures.

The outflows from Grayscale’s ETF were somewhat expected. Bloomberg Intelligence had previously projected that the fund would experience outflows of over $1 billion in the coming weeks. 

Some of this outflow can be attributed to investors shifting towards more cost-effective spot Bitcoin ETFs. With an expense ratio of 1.5%, GBTC is the most expensive US ETF directly investing in Bitcoin. In contrast, the VanEck Bitcoin Trust, the second-most expensive fund, charges 0.25%.

On the other hand, other spot Bitcoin ETFs have witnessed net inflows. BlackRock’s IBIT attracted nearly $500 million in the first two days of trading, while Fidelity’s FBTC received approximately $421 million. 

According to Bloomberg, these inflows suggest strong demand for Bitcoin exposure in physically backed ETFs, even beyond potential seed funding from the fund issuers.

Bitcoin Price Finds Support At $42,000

Currently, the Bitcoin price remains unaffected by the news of Grayscale’s transfers to Coinbase. The leading cryptocurrency is trading at $43,100, showing a slight increase of 0.8% over the past 24 hours.

However, since the commencement of ETF trading, it is important to note that the Bitcoin price has experienced a significant retracement, declining by 8%. This decline can be attributed to profit-taking and selling pressure, with Grayscale’s involvement being noteworthy.

In the event of a further drop in the Bitcoin price, a significant support level has been established at $42,000. If this level is breached, the next key level for Bitcoin bulls to watch is $41,350, followed by a potential dip below $40,000.

The market is eagerly observing whether Grayscale and its BTC selloff will continue and how this will impact the Bitcoin price leading up to the scheduled halving event in April, which many consider to be the main catalyst for the year.

Bitcoin price

Featured image from Shutterstock, chart from TradingView.com 

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PlanB’s Market Cycle Analysis: Bitcoin Gears Up For Skyrocketing Beyond $100,000

In a recent post that echoes his previous analysis, the renowned Stock-2-Flow (S2F) model creator, PlanB, highlighted a pivotal phase transition in the Bitcoin market. However, it may remain unrecognized by many.

Reflecting on his analysis from January of the previous year, PlanB recalled his declaration that the bear market phase had ended and an accumulation phase had commenced. Despite this, many at the time were still anticipating a fall to a Bitcoin price of $10,000.

Consequently, even as the analyst’s model signals a phase transition for Bitcoin, skepticism may still cloud the perception of many in the market.

Bitcoin Enters A Phase Transition, Poised For Rally

Despite the market movement, PlanB’s Bitcoin Market Cycle Model chart indicates that the flagship cryptocurrency has been in an accumulation stage. This critical period of consolidation began in early January last year, according to PlanB, aligning with the analyst’s earlier assertion that the bear market had concluded at that time.

The accumulation phase is typically marked by increased buying activity, often by long-term investors or ‘whales,’ laying the groundwork for future price surges.

PlanB’s analysis, shared earlier last year, suggests that Bitcoin had bottomed out in November 2022, with a low of $15,500. The analyst posits that the trajectory for Bitcoin is set for substantial growth leading up to the 2024 halving and the ensuing bull market in 2025.

PlanB forecasted in the post shared last January that Bitcoin’s value would trade above $32,000 post-halving and even reach or surpass the $100,000 mark in the bull market in 2025.

Bitcoin (BTC) price chart on TradingView.com

Further Surge Ahead

The bullish sentiment is further echoed by PlanB’s recent predictions, including a pre-halving surge, a rally following the approval of spot Bitcoin exchange-traded funds (ETFs), and a monumental peak anticipated in the coming years.

His YouTube video outlines a short-term forecast of Bitcoin soaring beyond $50,000 leading up to the April halving.

Peering into the future, the creator of the S2F model, PlanB, anticipates that BTC will surpass its previous highest value, potentially achieving a price point of $100,000 within the year. This forecast further gains credibility with the recent approval of spot Bitcoin ETFs in the United States by the US Securities and Exchange Commission (SEC).

PlanB’s long-term vision for Bitcoin is even more audacious, projecting a climb to $532,000 by 2025. This forecast is underpinned by the analyst’s Stock-to-Flow (S2F) model.

The model suggests a future where BTC transcends its current status to become a dominant digital store of value, potentially reshaping the traditional financial landscape.

Featured image from Unsplash, Chart from TradingView

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Bitcoin Has Large Resistance Wall Ahead: Here’s The Level To Watch

On-chain data suggests Bitcoin has a large wall of resistance ahead of it currently. Here are the exact levels that make up this important range.

A Large Amount Of Bitcoin Supply Was Purchased Between $42,700 & $44,000

According to data from the market intelligence platform IntoTheBlock, BTC is sitting just below a significant on-chain resistance zone. In on-chain analysis, the strength of any resistance or support level is defined based on the number of coins acquired by the investors there.

To any holder, their cost basis is naturally an important level; thus, they may be more prone to make some moves whenever the cryptocurrency’s spot price retests their profit-loss boundary.

How the investors might react to such a retest can change depending on the direction of the retest. Holders at a loss can sometimes be desperate to exit the market, so if the price retests their cost basis (that is, the retest is happening from below), they might sell to at least be able to get back their investment.

Such selling can provide resistance to the price. Only a few investors making such moves may not be relevant to the broader market. Still, if a significant number of traders acquired a large amount of BTC inside a narrow range, the reaction produced by a retest could be sizeable.

On the other hand, investors who were in profit before the retest may look at dips in their cost basis as an opportunity to accumulate more, thinking that the price would go up again. This buying, when large enough, can support the asset.

Now, here is a chart that shows how the various Bitcoin price ranges look like right now in terms of the amount of BTC that was acquired at them:

Bitcoin On-Chain Resistance

As is apparent from the graph, the $42,700 to $44,000 range hosts the cost basis of 2.68 million addresses, which acquired a total of 1.02 million BTC inside it. The average price of this range is around $43,400, which is above the current spot price of the cryptocurrency.

“Uncertainty can cause these holders to sell into their break-even point, increasing resistance in a move up,” explains the analytics firm. If Bitcoin can break through this resistance, though, it may have an easier time exploring higher levels, as it offers less resistance.

The chart shows that below the current spot price is the substantial $41,400 to $42,700 support range, which has helped cushion Bitcoin’s fall during the recent correction. Thus, even if the resistance zone rejects BTC, this support area may at least help it return for another go.

BTC Price

At the time of writing, Bitcoin is trading around the $43,200 level, down 8% in the past week.

Bitcoin Price Chart

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Cantor CEO Makes Gold And Bitcoin ETFs Comparison, Foresees True Rally With Halving

In a highly anticipated development, the United States Securities and Exchange Commission (SEC) granted regulatory approval for 11 spot Bitcoin ETFs, sparking excitement within the crypto community. 

However, despite initial expectations of a significant price surge, the Bitcoin market has experienced an 8% price drop since the ETFs began trading.

Bitcoin ETFs To Unfold Impact Over Time? 

Drawing a comparison with the launch of the first Gold ETF, Cantor Fitzgerald Asset Management CEO, Howard Lutnick, noted that the immediate rush to buy the asset did not materialize.

Lutnick remarks that historical data from the launch of the Gold ETF, SPDR Gold Shares (GLD), reveals that substantial price appreciation took place over several years. 

When GLD was introduced in November 2004, the price of gold stood at around $700. By December 2023, it had surged to an all-time high of $2,145. The gold market capitalization, estimated at $1 trillion to $2 trillion pre-ETF approval, ballooned to $16 trillion within a few years.

Likewise, despite the initial hype surrounding the spot Bitcoin ETFs, experts suggest that the true impact of these ETFs will unfold over an extended period. 

As reported by NewsBTC, market analysts at CoinShares estimate that the United States possesses around $14.4 trillion in addressable assets. 

Assuming a conservative scenario where 10% of these assets invest in a spot Bitcoin ETF with an average allocation of 1%, it could potentially result in approximately $14.4 billion inflows within the first year.

These significant inflows have the potential to propel the Bitcoin price to new highs and initiate a notable price uptrend. However, as Cantor CEO Howard Lutnick predicted, the halving event, expected to occur in April, remains the primary catalyst for Bitcoin’s growth.

Dual Catalysts For Crypto Market Enthusiasm

As the Bitcoin halving event approaches, analysis of past halvings reveals a pattern of substantial rallies leading up to the event, followed by a brief correction and consolidation period before a major bull run and peak. The peak typically occurs approximately 18 months after each halving, showcasing a consistent trend.

The first halving occurred on November 28, 2012, reducing the block reward from 50 BTC to 25 BTC. At the time of the halving, the Bitcoin price was around $13. 

However, within a year, it reached a peak of $1,152. Despite a subsequent fall in price to nearly $200 in 2015, critics declared the bursting of a bubble and the demise of Bitcoin. Yet, this trend would repeat in subsequent halving cycles.

The second halving occurred on July 16, 2016, reducing the block reward to 12.5 BTC. At the time, Bitcoin was valued at $664. 

The following year saw a peak of $17,760. Similarly, the third halving occurred on May 11, 2020, lowering the block reward to 6.25 BTC. Bitcoin was priced at $9,734 during the halving and peaked at $69,000 the following year.

Based on the historical cycles, it is evident that the upcoming halving scheduled for April 2024 will be a significant catalyst for Bitcoin. However, it is important to note that Bitcoin ETFs will also play a crucial role. 

These ETFs are expected to positively impact the cryptocurrency’s price and bring new inflows and interest to the crypto market.

Bitcoin ETFs

Featured image from Shutterstock, chart from TradingView.com 

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Crypto Community Raises Alarm Over Coinbase’s Dominance Of Bitcoin Held In Spot ETFs

Coinbase, the largest cryptocurrency exchange in the United States, is presently serving as the custodian of the majority of the Spot Bitcoin ETFs managed by various asset management companies in the industry. This notable concentration is raising worries in the crypto community about significant centralization and potential risks associated with the custodianship. 

Coinbase Dominate ETFs As Major Custodian

Coinbase’s significant role in the advancement of Spot Bitcoin ETFs has become a target of scrutiny in the crypto community. The American crypto exchange is currently the custodian of 9 out of 11 Spot Bitcoin ETF companies, including BlackRock, Grayscale, Ark/21 Shares, Bitwise, WisdomTree, Invesco/Galaxy, Valkyrie, GlobalX, and Franklin Templeton. 

Notably, only Fidelity and VanEck have opted for alternative custodianship approaches. Fidelity is employing a self-custody program for its Spot Bitcoin ETF, while VanEck has selected Gemini, a crypto exchange, as the custodian for its Spot BTC ETF. 

The prominent role of Coinbase as the major custodian for Spot BTC ETFs has raised serious questions and concerns in the crypto community. Specifically, Gabor Gurbacs, Director of Digital Assets Strategy at VanEck, has deemed Coinbase’s concentrated level of custodianship to be a “double-edged sword.” 

Gurbacs stated that Coinbase would bear substantial responsibility as the primary custodian for Spot Bitcoin ETFs and would reap significant benefits from it. However, he also hinted at potential counterparty risks associated with concentrating assets within a single entity. 

Similarly, a crypto analyst on X (formerly Twitter) highlighted the potential for increased scrutiny from the United States Securities and Exchange Commission (SEC) regarding Coinbase, given its prominent position in the Spot Bitcoin ETF market. The crypto exchange is presently in a legal battle with the SEC, and many crypto enthusiasts believe that Coinbase’s regulatory challenges may pose a threat to the success of Spot BTC ETFs. 

Bitcoin price chart from Tradingview.com

Coinbase CFO Bullish On Bitcoin ETFs

The Chief Financial Officer of Coinbase, Alesia Haas appeared recently in an interview on Bloomberg TV, discussing the effects of Spot Bitcoin ETFs in the crypto market. 

When asked if the momentum of Spot Bitcoin ETFs would become a “game-changer” in the future, Haas responded confidently with a resounding “absolutely.”

The Coinbase CFO declared that the SEC’s approval of Spot Bitcoin ETFs was an important day for crypto, as it positions Bitcoin into a much broader investable asset class. She also revealed that the deployment of Spot Bitcoin ETFs would allow investors to have greater access to BTC products, extending its reach to billions of people around the globe and increasing the amount of inflows into ETFs. 

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Anticipation Peaks As Bitcoin Halving Countdown Drops Below 100 Days: Will Prices Skyrocket?

With the Bitcoin halving event drawing near, Data from crypto industry research and analytics platform, CryptoRank.io, has recently revealed that a significant majority of its users – 79% – are bullish about the upcoming halving, while 21% have bearish skepticism.

This sentiment echoes the historical trend where previous halvings have catalyzed bullish rallies in Bitcoin’s price.

Bitcoin Halving Countdown And Price Trajectory

The Bitcoin halving, less than 100 days away, is a pivotal event in the crypto world. This process happens approximately every four years, and the reward for mining Bitcoin blocks will be halved.

This reduction in supply has historically led to price increases, with the previous halving in 2020 resulting in a 401.1% rise in Bitcoin’s price, according to CryptoRank.io. The anticipation of a similar price boom is palpable as the crypto community closely watches the countdown to this significant event.

Despite the optimistic sentiment towards the halving, Bitcoin’s recent price action tells a different story. Following the initial excitement around the launch of spot Bitcoin ETFs, Bitcoin has been experiencing bearish price action.

In the past week alone, the cryptocurrency has seen a nearly 10% decline, eroding its gains after spot ETF approvals. This price behavior suggests a cooling off of the spot ETF hype and a period of consolidation in the absence of significant news or developments.

However, Bitcoin is currently hovering above the $43,000 mark, showing a minor recovery in the last 24 hours with a 1.8% increase.

Bitcoin (BTC) price chart on TradingView

BTC Price Prediction

This current price movement has not dampened the long-term bullish outlook of many analysts. Figures like Ash Crypto, a notable voice in the crypto trading community, advise a long-term perspective.

Ash Crypto’s has recently shared an analysis drawing parallels between Bitcoin and gold, suggesting that if Bitcoin emulates gold’s post-ETF market cap surge, it could potentially reach or even surpass half of gold’s market cap. Such a scenario could propel Bitcoin’s price to an estimated $500,000 in the coming years.

Moreover, Ash Crypto highlights Bitcoin’s potential impact on traditional financial markets, pointing out the immense global stock and bond market caps.

As BTC continues to gain legitimacy as a financial asset, it could capture a substantial share of these traditional market caps. This shift aligns with a new generation of investors who view Bitcoin as a novel investment opportunity.

Featured image from Unsplash, Chart from TradingView

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Ethereum Trouncing Bitcoin, ETH/BTC Ratio Bouncing Higher: Will This Trend Continue?

Amidst a volatile crypto market, Ethereum (ETH) is gaining momentum, outperforming its long-time rival Bitcoin (BTC). According to Kaiko data, the ETH/BTC ratio has steadily risen, rebounding from multi-year lows. 

ETHBTC ratio trend | Source: Kaiko on X

ETH/BTC Ratio Rising, ETH Momentum Building

The ETH/BTC ratio technically gauges market sentiment towards these two leading crypto. The recent rebound indicates investors are increasingly bullish on Ethereum’s potential relative to Bitcoin. 

This upward trajectory is fueled by growing optimism surrounding the potential approval of spot Ethereum ETFs and the general confidence that markets will trend higher in 2024. The prospect of this product entering the market has also injected fresh energy into the ETH ecosystem, lifting the second most valuable coin by market cap.

Related Reading: Institutional Inflows Into XRP Surges 244% Amid ETF Speculation

After protracted lower lows, the ETH/BTC ratio began rising immediately after the United States Securities and Exchange Commission (SEC) approved 11 spot Bitcoin ETFs last week. This unexpected shift, analysts observe, is primarily because of increasing confidence in the SEC approving a similar product for ETH.

Spot Ethereum ETFs, which would provide direct exposure to the Ethereum market, would make it easier for institutional investors to benefit from the volatility of ETH. So far, the SEC has approved an Ethereum Futures ETF, which, unlike the spot ETF, tracks an index, not the direct price of this asset.

Blackrock is among the leading Wall Street giants interested in issuing a spot Ethereum ETF. Considering its history of success, the decision by one of the world’s leading asset managers to apply for this product is an endorsement of its prospects. Earlier, Larry Fink, the CEO of BlackRock, said Ethereum, despite its scaling challenge, might spearhead the tokenization drive in the years ahead.

US SEC Yet To Clarify Whether Ethereum Is A Commodity Or Security

Even so, the SEC has yet to clarify whether ETH, a coin pre-mined with some assets distributed to the Ethereum Foundation, is a commodity like Bitcoin. Earlier, Gary Gensler, the chairperson of the SEC, was cornered by the United States policymakers to give the agency’s stand on the coin but didn’t.

Ethereum rising versus Bitcoin on the daily chart | Source: ETHBTC on Binance, TradingView

Nonetheless, with the prospect of spotting Ethereum ETFs and the dominance of Ethereum in decentralized finance (DeFi) and non-fungible tokens (NFTs), ETH will likely continue outperforming BTC in the coming months. Price action data shows that ETH is already up 20% versus BTC in the past trading week.