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Bitcoin is far from the 2018 bubble. On-chain data points to a strong BTC market

Dov Herman
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Last weekend, Bitcoin was breaking the law in the range of several months of consolidation, but it still loses around 30% to its historic highs. The scale of the ongoing downward correction of BTC should not be as worrying as the 2018 bear market, data from on-chain analytics firm Glassnode indicate.

Bitcoin still in wallets. Long-term holders do not flee the BTC market

The blockchain analytics firm said investors who owned bitcoin for more than a year showed less interest in liquidating their investments compared to those who held a digital asset for three to six months. Her dataset covered a BTC adjustment period of approximately $ 65,000. earned on April 14 to approximately $ 44,000. recorded on Monday, August 9. On the other hand, all investor groups played a key role in breaking the 2018 BTC price from $ 19,891 to $ 3,128. With most of the “old coins” failing to hedge their 275% annual profits even after a 35% downward revision, Glassnode’s data hints at a “strong HODL” that could have made Bitcoin avoid a mass surrender similar to 2018’s. – Despite a strong rally to 45 thousand. USD, the bitcoin market still has not experienced a significant increase in the number of issued old coins (i.e. older than a year). This is very different to the 2018 bearish market where old hands took stock liquidity on most relief rallies, comments Glassnode.

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There is no panic selling like in 2018 on the bitcoin market.

Over-pricing driven by the initial coin offering (ICO) craze in 2017 and 2018 was the main cause of the cryptocurrency crash a few years ago. Random startups raised billions of dollars to build blockchain platforms, but most of them turned out to be scams or not very successful. When the bubble finally burst, the cryptocurrency market crashed from $ 700 billion in January 2018 to $ 102 billion in December 2018. As a result, BTC, which was one of the main currencies of choice for iCO funding, fell 85.27% from its then-record high of $ 19,891.
Bitcoin’s performance during the 2018 cryptocurrency bubble and its subsequent price slump. Source: TradingView In 2022, things are different: the bitcoin rally has its origins in a solid macroeconomic foundation as investors seek safe havens against loose monetary policies being implemented by central banks around the world. As a result, central bank efforts to protect economies from the financial aftermath of the Covid-19 pandemic pushed global debt to over $ 281 trillion last year. It accounted for 355% of the global gross domestic product. According to the Institute of International Finance, debt is expected to increase by another $ 10 trillion in 2022.
Global public debt rose to its historic highs in 2020. Source: Institute of International Finance – People have less wealth and more debt. The devaluation of fiat currencies has made everything around us more expensive. Bitcoin’s promise is that we will usher in a new era of healthy money. The currency is outside the system. Nobody controls her. People will be able to save again on their way to financial freedom. Money will not lose value over time. In fact, their purchasing power will increase, wrote Anthony Pompliano, partner at Pomp Investments, in a note to customers.
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Short-term investors are back in buying BTC?

Bitcoin’s last rebound below $ 30,000 up to over $ 45,000 It also coincided with a moderate jump in the proportion of investors who last bought a digital asset three to six months ago.
Heat map of unspent transactions in the Bitcoin network. Source: Glassnode On July 19, when BTC was hovering around $ 30,000, net unspent cryptocurrency trading for the range of traders who had been in the market for 3-6 months (bright orange on the chart) was 12.84%. The index jumped to 13.44% on Monday. On the same day, BTC was traded around $ 45,130, which shows that weak hands are slowly getting strong. We’re on Google News. Search for what’s important and stay up to date with the market! Watch us


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