Short-term Bitcoin buyers are now back in profit
On-chain calculations and activity for the Bitcoin network are pulling out of the bear market conditions. However, the positive sentiment comes at a time when US regulators are cracking down on the crypto industry.
On February 21, blockchain analytics firm Glassnode reported on the state of the Bitcoin network. The findings were generally positive amid mixed feelings over Uncle Sam’s war on crypto.
“Investor behavior on the chain appears to be reaching an inflection point, suggesting a new cycle,” the firm noted.
Glassnode attributed the increase in activity on the chain to the Ordinal inscription craze this month. As reported by BeInCrypto, Ordinals are NFTs that can be permanently stored inside a Satoshi on the blockchain. They peaked last week with more than 140,000 Ordinals subscribed to the Bitcoin network.
“Taproot usage hit an all-time high, with 8.12% of all used exits last week using the latest Bitcoin script type.”
Old hands continue to hold
Ordinals aside, the outlet noted that the volume of Bitcoin value transferred remains extremely low. It reported that it was less than 115,000 BTC per day for coins younger than six months. This suggests that older coins are still dormant or held.
Furthermore, the total supply younger than six months has not increased significantly so far this year, hovering around 4.3 million BTC. The supply older than six months hit an all-time high of nearly 15 million BTC as old hands continue to hoddle. Glassnode said these are bear market patterns usually after a significant selloff, adding:
“This provides a measure of periods where older hands are unlikely to spend, potentially signaling a perception that the market is oversold, at least in the short term.”
In addition, short-term owners’ realized losses have fallen to cycle lows. “Last-gasp speculators are flushed out, and coins are transferred to bottom-building buyers,” it explained. Glassnode concluded that low currency inflows also indicate accumulation and reluctance to sell by both short-term and long-term Bitcoin holders.
“Filtering only for coins submitted to exchanges, we can also see that several indicators point to a turn in the cycle and a marked shift in investor behavior patterns.”
Bitcoin tops $25,000
Bitcoin prices topped the psychological $25,000 barrier again during the morning of February 21. BTC hit an intraday high of $25,075 before retreating slightly to $24,886 at press time.
The asset continues to build on gains despite the SEC’s war on crypto and is up 14% in the past two weeks.
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