Bitcoin Price Analysis

Digital Currency Analysis Weekly August 25 (September 3)


The price of Bitcoin, despite the increasing trend of distribution, selling by old investors and the formation of a divergence pattern in intra-chain activities, has continued its upward trend and has reached its multi-month price peak.

According to reports گلسنودThe Bitcoin trading market continued to move strongly for another week, forming an uptrend from a weekly low of $ 43,998 to a multi-month high of $ 49,669.

Following this uptrend in the Bitcoin trading market and the replacement of the fear of entering the market with the greed of being left on the moving train of Bitcoin prices, the market value of more than two trillion dollars has become more probable for the king of digital currencies.

The key price level for the advancement of this digital currency is the $ 53,000 resistance, which will leave the 13-digit value of the Bitcoin market again.

According to intra-chain data, Bitcoin long-term investors were also able to profit from this uptrend and price increase this week, which of course was not a significant figure.

In this week’s analytical report, Golsnood examines the state of intra-chain activity and the current behavior of bitcoin investors in the trading market. We will review this report later.

Digital Currency Analysis Weekly August 25 (September 3)
Bitcoin Price Chart (Week 34)

Increasing the volume of open contracts

In the derivatives market, the rate of futures and options contracts has risen, along with prices, to reach higher levels. After a massive sell-off in May and a drop in open market contracts from $ 27.4 billion, Bitcoin futures traded up $ 6 billion again from its lowest price stabilization level. And increased by 56%.

With the increasing use of leverage by traders in futures contracts, another $ 1 billion was added to the market value of bitcoin open contracts this week alone.

Depending on the orientation of traders, the rate of total future financing tends to form a long-term trend in the market. The rates recorded for financing are also positive; This is because the value of futures contracts was higher than the current price at the end of July. At no level, however, is the budget comparable to the cattle market in the first six months of the year. This is evidence that excessive leverage has not yet entered the market and we are currently witnessing a sound and reasonable uptrend.

Digital Currency Analysis Weekly August 25 (September 3)
Bitcoin futures chart

Optional markets have also reached their highest level in recent months, rising more than $ 4.1 billion (up 105%) since hitting record lows in June. The current level of $ 8 billion in open contracts is similar to the levels observed in May and from January to February 2021 (January to March 99). Note that prices were lower at the time, and in both cases, between $ 30,000 and $ 40,000 were traded.

It also shows that relative to the total market value, the amount of open contracts in derivative markets is almost lower than the amount of leverage used by traders in the first half of the year.

Digital Currency Analysis Weekly August 25 (September 3)
Funding rates for futures contracts in exchange offices

Increasing the entry of bitcoins into exchanges

In the past week, older investors have entered the market. The volume of bitcoins entering exchanges has grown significantly due to this amount of intra-chain transactions. In July, nearly 110,000 bitcoins were taken out of the transfer cycle, which is a significant change from the volume of incoming 140,000 bitcoins that entered the network in May. However, the total exchange balance in August was close to 2.5 million bitcoins, equivalent to approximately 13% of the total bitcoins in circulation.

Digital Currency Analysis Weekly August 25 (September 3)
Rates of open contracts in all exchange offices

Intra-chain data on the turnover of exchange offices from the activities of traders and investors this week indicate the entry of liquidity and capital into the market cycle, which has been achieved due to their satisfaction with the current market trend and the desired profit. It should be noted that this rate of capital inflow into the market cycle, unlike the previous cattle market, which was observed from December 2020 to April 2021 (December 99 to May 1400) does not seem logical.

Digital Currency Analysis Weekly August 25 (September 3)
Bitcoin inventory rates in all exchanges

In the current market conditions, and by examining the data related to the activities of investors, we find that in general, the number of investors who are profitable and buy and sell, is more than those who have suffered from this market. On the other hand, the information we get from the amount of profit to the detriment of major market participants raises the scales towards profitable capital, which indicates that traders are aiming to achieve higher profits and their positive view of the continuing upward trend of Bitcoin prices after crossing The range is $ 50,000.

Digital Currency Analysis Weekly August 25 (September 3)
Bitcoin transfer volume from / to all exchanges in 7-day moving average

Investigating the activities of investors

This week saw the resumption of activity and the influx of capital by investors who have been out of the market cycle for nearly six months. The figures given by the Consumer Outcome Length Measure (SOAB) measurement confirm that the bitcoins in the accounts of these investors have re-entered the financial cycle of the market. In the following, we will examine the reason for their desire to enter the market in two ways:

  • Injecting capital at the peak of the cattle market and earning valuable profits through a significant price increase
  • Capital inflow when the price has corrected the trend and returned to its previous support point due to massive sales.
Digital Currency Analysis Weekly August 25 (September 3)
Profit and loss rate chart realized

We can also see a similar view of the outputs spent over a period of six months to five years, during which experienced and experienced investors and traders have experienced many ups and downs and have been able to withdraw profits from the market when necessary. .

Digital Currency Analysis Weekly August 25 (September 3)
Periodic diagram of spent expenditures

Another perspective that examines the behavior of bitcoin investors and holders over a six-month to five-year period suggests that outflows during this period, when between 5 and 7 percent of total capital outflows, occurred during periods of high market volatility. There have been.

Digital Currency Analysis Weekly August 25 (September 3)
Outputs spent over a period of 6 months to 5 years

In addition, in the previous market cycle, older holders were more active than new investors. In similar cycles during 2011 and 2013, veteran investors usually decided to raise their capital when the price was at its peak or at its lowest point. However, after the maturity of the Bitcoin market and the entry of more investors, this policy changed and with the formation of a principled rise and fall in prices in accordance with the cycles of the digital currency market, capital inflows and outflows will take place.

Also, the criterion for measuring the average lifespan of spent outputs (ASOL), by forming a specific process, has acted to confirm that the major capital spent was by the long-held holders of the market. In the meantime, another trend has been examined, which has also examined the growth of the entry rate of medium-term investors, and this peak of this trend took place in July. This event raises two issues:

  • Most of the realized profits are related to the old-fashioned market holders, and the diagram confirms this very well.
  • Investor demand has eased market pressure and continued the upward trend in prices.
Digital Currency Analysis Weekly August 25 (September 3)
Graph of spent expenditures (7-day moving average)

The formation of the Hoodlers’ realized capital wave pattern also confirms that the number of investors less than a month old when they entered the Bitcoin trading market increased in August. Of course, those experienced hoodlers, by converting their capital into liquidity in recent months, were added to this statistic and pushed its rate to higher levels. However, it should be noted that the bitcoin trading market has experienced this amount of capital increase in this period, especially in the accumulation phase of 2020.

Digital Currency Analysis Weekly August 25 (September 3)
The pattern of realized capital waves of Hoodlers

Continuation of divergence in intra-chain activities

While a very good divergence pattern has formed in the Bitcoin trading market, the price movement is still not aligned with in-chain data. According to statistics from the daily chart, the number of transactions and transactions in the bitcoin trading market still fluctuates at its lowest level, between $ 175,000 to $ 200,000. In the last five years, we have witnessed the occurrence of such trading levels for several main reasons, which are as follows:

  • In 2016-2017, when the market had a positive trend, a strong return of prices from high levels and disbelief from the continuation of the upward trend of the price led to this issue.
  • During the bear market and the downturn of 2018-2019, the negative view of Bitcoin and its market, paved the way for an 85% price correction from high levels.
  • In the current market and the current situation where 50% of the bitcoin price has been corrected, we are also watching the price stabilization in the last two and a half months.
Digital Currency Analysis Weekly August 25 (September 3)
Number of Bitcoin transactions completed (14-day moving average)

Due to the price correction and the long-term relative stability of the Bitcoin price, the volume of daily transactions has also decreased, and during this period, we have only seen $ 18.8 billion in transfers on the Bitcoin network. This figure has decreased by nearly 37% compared to the peak of the bitcoin price bubble in 2017, which is a 57.6% decrease in the volume of transactions compared to before the start of the price correction process in May. It should also be noted that the volume of transactions in the current market has increased by 276% compared to the previous year, when a total of $ 5 billion was traded. In addition, Bitcoin was worth $ 10,000 at the time and is now trading at $ 50,000, which is a 500 percent increase.

Digital Currency Analysis Weekly August 25 (September 3)
Statistics of the total volume of bitcoin transactions (30-day moving average)

In any case, despite the divergence formed between price increases and low intra-chain activities, all the dynamic patterns of supply accumulation in the market are quite positive. The past week has seen the largest accumulation of coins by long-term investors, representing 12.69 million bitcoins. This amount has exceeded its previous peak in October 2020 (October 99).

In-chain data from the Bitcoin network in the first six months of the year showed that more than 1.75 million bitcoins were at their lowest price level. This is due to price correction and long-term consolidation in this period. As a result, the ongoing investments were largely diminished, and by the end of 2020, long-term hoodlers had ceased to operate in the market in order to be ready to re-enter the market trading cycle at the right time.

It took only 100 days to recover from the lowest supply to the highest level in the market, which indicates the significant accumulation in the initial phase of the leading cattle market. The fact that we are still in the early stages of this process suggests that the number of experienced Hoodlers and long-term investors in the market is increasing.

Digital Currency Analysis Weekly August 25 (September 3)
Total supply chart under long-term holders

Conclusion

It also makes sense for investors to make local transactions and spend part of their capital to save their profits and benefit from price increases. Of course, this does not contradict the thinking and strategy of long-term investment and the belief that the price of bitcoin will reach higher levels.

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