Is It Right Time To Accumulate Bitcoin? Here’s what On-Chain Data says
Bitcoin’s price rose after the Federal Reserve announced a rate hike that was less significant than those seen at previous meetings and still indicated that continued increases may be warranted. However, the royalties were pulled down as the dollar rose with the return of risk aversion, leading to relatively bearish sentiment among investors.
On Wednesday, the Federal Reserve raised its target fed funds rate by 0.5%, bringing it up to a range between 4.25% and 4.5%.
This move was in line with Wall Street expectations. According to reports, the members of the Federal Open Market Committee do not expect a change from rate hikes to rate cuts before the year 2024.
Bitcoin is now trading in a bearish direction, despite having just broken above a crucial resistance level around $18,150. Bitcoin’s price, however, plunged below the $18,000 level following the Fed’s statement that it will raise interest rates.
This points to the possibility that the current sales pattern will continue. BTC is trading at $17,708 at the time of writing, representing a decrease of approximately 1% over the past 24 hours.
What On-Chain Data Indicates?
According to chain data, the measurement ‘Bitcoin (BTC) Spent Output Value Bands: All Exchanges’ suggests that the amount of whale occurrences on cryptocurrency exchanges is decreasing.
Usually, the development of the bottom of the Bitcoin market is caused by whales selling their BTC holdings by transferring them to cryptocurrency exchanges.
After a bear market that lasted an entire year and witnessed massive selling by whales and miners, Bitcoin is now starting an accumulation cycle before the next halving.
In fact, institutional investors are expected to discreetly buy the decline in a manner similar to the accumulation cycle that occurred in 2019-2020.
Cryptoquant’s analysis says:
“In terms of spending, the continued high level of whale spending is contrary to a sign that could lead to a change in the market cycle. An upward, sustained price trend is usually accompanied by whales holding onto their bitcoins.”
In a related development, according to the findings of a survey conducted by a reputable crypto analytics platform, despite 2018 being a difficult year for the majority of the cryptocurrency market, there seems to be no shortage of believers that 2023 would provide a chance to recover .
Cryptocurrency monitoring website CoinMarketCap is now conducting a year-end closing survey. Participants were asked to submit their votes according to whether they expected the next year to be bullish or bearish, and more than eighty percent of respondents voted “bullish.”
Is now a good time to buy?
Bitcoin traded in a narrow band between $18,500 and $20,000 between September and October. But after the spectacular collapse of the crypto exchange FTX, bitcoin plunged 26% at one point.
For anyone wondering if this is a good time to buy Bitcoin, I wouldn’t recommend it. The overall macroeconomics for bitcoin is unfavorable. On-chain/flow numbers for bitcoin are quite bearish.
As a result, if you have a time horizon of two to four weeks, it is certain that now is not the best moment to buy bitcoin. Unless you are aiming for long-term gain.
As such, you can buy and then be ready to hold on for dear life for months, when ideally the situation would have improved a lot.
