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Bitcoin analysts map out the key bull and bear cases for BTC’s price action

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The study details Bitcoin’s recent record low volatility, with traders expecting an eventual price breakout, but Oct. 26 Bitcoin The price move towards $21,000 has yet to be interpreted as confirmation that $20,000 has become support.

In a recent “The Week On-chain Newsletter,” Glassnode analysts plotted a bullish and bearish case for BTC.

according to reportThe bear case includes limited on-chain trading activity, stagnant non-zero address growth, and declining miner profits, indicating strong sell-off risk for Bitcoin, but the data suggests a long-term Hodler It also shows that ETFs are more determined than ever to weather the current bear market. .

On the other hand, the bullish case is accompanied by increasing whale purses, outflows from centralized exchanges, and hodling by long-term investors.

Growth of new addresses stagnated

The growth of on-chain active addresses remains stagnant across the BTC network. Declining transactions lead to lower network utilization and more users, a factor that could hinder BTC price expansion.

Bitcoin transactions and Bitcoin prices for active addresses.Source: Glassnode

Have a new address within the Bitcoin ecosystem non-zero address This is a trend that also occurred in November 2018. After the stagnant growth of non-zero new addresses in 2018, the BTC price continued to fall and did not recover until January 2019 when this metric began to increase. did.

A new non-zero bitcoin wallet.Source: Glassnode

Related: Public Bitcoin Miner Hash Rates Are Booming, But Is Bitcoin Really Bearish?

Minor selling can trigger new selling

Over the past few years, many BTC miners have held large amounts of BTC. However, since the start of the bear market, many miners have sold their BTC to cover capital and operating costs.

When BTC Mining Production Costs Rising Against the backdrop of declining revenue, miners are selling their newly mined BTC to deleverage. Glassnode warned of the current:

“Miner deleveraging events can lead to thin order book distributions, historically light demand, persistent macroeconomic uncertainty and liquidity constraints.”

As the price of BTC falls and miners become less profitable, they may be forced to liquidate more of their Bitcoin holdings.

Bitcoin balance in miner wallet.Source: Glassnode

whales gather

Despite the falling BTC price, many BTC whales above 10,000 BTC may be increasing their holdings even in bear market conditions. As you can see in the chart below, it continues to accumulate BTC after distributing in April and September.

Bitcoin cumulative trend chart.Source: Glassnode

BTC withdrawal from centralized exchanges could reduce selling pressure

Funds moved from centralized exchanges weaken spot sale pressure at the market. A large amount of his BTC has been withdrawn on Coinbase, one of the highest volume centralized exchanges. Comparing his current BTC outflow from Coinbase to the peak since March 2020 on the exchange, more than 48% of total BTC on the exchange has been transferred.

Glassnode points out:

“Coinbase has seen a very large net withdrawal of -41.6k BTC this week…These outflows are based on our best estimate of wallet clusters and both investors It is important to note that any combination of coins flowing into a wallet, and/or an institutional grade custody solution.”

Bitcoin Balance on Coinbase. Source: Glassnode

hodler keeps hodling

Realization Cap According to the HODL Waves metric, the total US dollar assets held in BTC, valued at the time of each coin’s last trade, is disproportionately skewed toward long-term holders. The percentage of wealth contained in coins moved in the last three months is now at an all-time low.A conflicting observation is that the wealth held by coins older than 3 months is hodler) is now at a record high.

Bitcoin HODL Wave.Source: Glassnode

While some Bitcoin analysts believe BTC has seen low volatility during this period,calm before the stormAnd the current macroeconomy and BTC price surge could indicate Hodler’s determination as a winner.