Bitcoin price now below $20,000 - how will things continue in the next few weeks?

9/26/2022, 04:14 PM
Bitcoin price now below $20,000 - how will things continue in the next few weeks?
Bitcoin's price has been struggling around $20,000 for the past month, but on-chain indicators are showing early signs of a possible recovery. Social indicators showed a surge in Bitcoin interest on social platforms over the weekend. Bitcoin that has been inactive for more than 90 days hits a new all-time high. Despite recent market downturns, Bitcoin HODLers' conviction seems unshakable.

In recent months, high price gains, trading euphoria and massive recoveries in Bitcoin have not really been the order of the day. However, while BTC price is still struggling around $20,000, on-chain indicators are showing early signs of a possible, albeit slow, recovery.
For the past week, Bitcoin has been hovering between $19,500 and $18,700. Although the current week opened below $19,000, sentiment surrounding the cryptocurrency and its price action remains positive.

Bitcoin Fear and Greed Index Over the past weekend, Santiment social indicators saw a noticeable surge in Bitcoin interest on social platforms. Among the top 100 cryptocurrencies, Bitcoin was the trending topic in more than 26% of discussions for the first time since mid-July.
The total volume of Bitcoin Coin-Days Destroyed (CDDs) has reached an all-time low in the last 90 days. So the majority of long-term investors appear to have been inactive for several months.

The CDD measures the economic activity of a specific cryptocurrency. Coins that have not been moved for a longer period of time are weighted accordingly. Every bitcoin accumulates a coin day with every inactive day. The sum of all inactive Bitcoin multiplied by their total accumulated inactive days results in the total volume of coin days. However, if Bitcoin is moved, your accumulated Coin Days expire - this value is called Coin Days Destroyed (CDD). The lower the CDD value, the less long-held bitcoin is active. This value can provide information about the sentiment of long-term investors.

Most recently, such CDD all-time lows (ATL) were observed in July 2020, August 2018, October 2016 and June 2015. During all of these previous ATLs, BTC price has also been in consolidation streaks near lower long-term support levels.
The high number of inactive coins can be interpreted as a strong conviction of long-term Bitcoin investors. At the same time, this could also be due to the low level of interest during a bear market. Because lower interest in the overall market automatically leads to lower on-chain activity and thus lower indicator values.

Another interesting trend is that the 3 month dormant bitcoin now accounts for an ATH of 86.3% of the total supply in US dollars. A look at the Realized Cap HODL Waves chart shows how unshakable and unwavering investor conviction is despite recent price developments.

The growing number of inactive coins indicates intact accumulation even with lower prices. Previous 3-month Coin Days ATHs coincided with the market's macro lows, but the consolidation may last longer than the empirical examples due to other macroeconomic factors.

In addition, a worrying trend in whale wallet graphs has been noted. The number of bitcoin held by these addresses has steadily decreased over the past 11 months. Although long-term holders continue to accumulate the asset, the inventory held by whales (100-10,000 BTC in this case) has hit a two and a half year low. In the short-term, the next crucial price level for bitcoin appears to be around $19,025. There, more than 1.6 million addresses hold over 869,000 BTC, according to data from IntoTheBlock's In and Out of Money Indicator.

The cryptocurrency industry is still in its infancy, and traditional financial institutions have been generally skeptical of its potential. However, in recent years there has been a shift in attitude among leading banks and asset managers, with many of them now offering crypto products.

This adaptation to the crypto sector is essential for the survival of these institutions. More than ten years have passed since the emergence of the first cryptocurrency, Bitcoin. At that time, blockchain technology was brand new, and many representatives of the traditional financial sector initially viewed it with skepticism. In the years that followed, skepticism about the original cyber motto and the following digital currencies, Ethereum & Co., continued to be vehement.

Numerous prominent representatives of the financial sector insisted on completely denying cryptocurrencies any value or benefit. Unforgotten is the statement made by JPMorgan boss Jamie Dimon a few years ago at an investor event, in which he called Bitcoin a scam that would inevitably blow up. Or BlackRock CEO Larry Fink, who emphasized in 2017 that Bitcoin just shows how great the demand for money laundering is in the world ... It's nothing more.

However, in recent years there has been a shift in attitude among leading banks and asset managers. More and more of them are now offering crypto products, Adaptation to the crypto sector is essential for their survival.

The traditional financial industry has been slow to adapt to the rise of cryptocurrencies and blockchain technology. However, this is starting to change, with more and more institutions offering crypto products. This adaptation is essential for the survival of these institutions, as the cryptocurrency industry is only going to grow in importance in the years to come.