Bitcoin has spent the month of August extremely bullish by gaining over 23% so far for the month from $39,974.90 at the beginning to currently stand above the $50,000 resistance zone, as of the time of this writing. The altcoin cryptocurrency market has also been very bullish with major cryptocurrencies like ADA, XRP, ETHER, and AXS posting double-figure gains.
The flagship cryptocurrency has now surpassed the $50,000 level which many believe was the last biggest challenge Bitcoin had to face before pushing towards the previously established all-time high.
Let’s take a look at what on-chain analysts are saying.
William Clemente, the lead insights analyst at Blockware Solutions and a cryptocurrency on-chain analytics expert tweeted that “83% of Bitcoin supply hasn’t moved in at least 3 months. 70% hasn’t moved in at least 6 months. HODLers set the floor.”
According to William’s newsletter with blockware solutions, he uses the realized price distribution, which is an on-chain metric that shows how much of Bitcoin’s money supply has moved at different price levels.
The chart shows that Bitcoin currently sits above a large amount of on-chain volume both between the $30K-$40K range and some in the mid-40s. It concluded that the final zone of volume Bitcoin needs to clear to the upside is between $56K and $59K.
In his interview with Anthony Pompliano on YouTube, William stated, “This is basically on-chain volume profile… we have a good amount of support under us.”
An analysis of miners’ profitability was done. It stated that after the massive drop in hash rate due to Chinese miners migrating and the record difficulty adjustment that followed, the miners still securing the Bitcoin network became extremely profitable. The Miners Profitability on-chain metric was used to explain this.
It concluded that as hash slowly comes back online, this profitability is fizzling out, but is still significantly higher than before.
It also used another miner metric, the miner net position change, to explain further that since the current miners are more profitable, their sell pressure on the market is reduced because they no longer need to sell as much BTC to cover their operational costs.
On this, William stated, “We are seeing strong accumulation from miners. With the current profitability level, it makes sense.”
The next analysis done is the realized cap which hit a new all-time high. The realized cap is the capitalization of Bitcoin based not off the current marginal price bid and then multiplying that by current circulating supply, but rather uses the time coins were last moved.
This reaching a new all-time high indicates that coins are no longer being sold at a loss and there are strong capital inflows. On this, William stated, “This being at an all-time high means a few things… coins are no longer being sold at a loss… it shows that there are new capital inflows coming in and buying at these prices. It is also a good sign that the market is absorbing and profits are being taken from below.”
Another metric explained are 3 ratios which are the illiquid Supply Shock Ratio, Exchange Supply Shock Ratio and LTH Supply Shock Ratio. Speaking on these ratios, William stated that the illiquid supply shock ratio is looking at a qualitative view of the movement of coins from weak hands to strong hands. According to the metric, it has been bullish all week, indicating that more coins are moving from weak hands to strong hands.
The Long-Term Holders (LTH) supply shock ratio according to William is similar to the illiquid supply shock ratio but instead of looking at spending behaviour, we are looking at the age of the entities. This being bullish indicates that coins are moving from short term holders to long term accumulators and it is also showing that entities that were regarded as short term are moving to become long term holders as they are moving past the 155-day threshold.
The exchange supply shock ratio looks at the amount of coins that are available to be bought on exchanges relative to the overall supply. The trend of this ratio looks to be moving sideways but moved bullish around the beginning of August. On these William stated, “the illiquid supply and the LTH supply are looking really bullish.”
A number of other metrics were looked into but ultimately the general consensus is that all indicators are pointing to a bullish bitcoin that will most likely surpass its previous all-time high around $65,000. When William was asked what price he thinks Bitcoin will end the year with, he had this to say, “I am going to say this… by the end of the year I think $75,000 for 1 BTC is conservative. To an extent, I believe we get a new all-time high next month but it will depend on some macro factors. If we do not get any existential threats, I will say we get all-time highs next month. The highest I think Bitcoin could possibly get this year will be around $176,000.”
Bitcoin now trades $50,350, 2.37% for the day, as of the time of this writing.