- Market players seemed ready to take action when Bitcoin was ready to move higher.
- There may be some profit taking, but macroeconomic factors supported an upward trend.
Since this cycle became the longest bear market in crypto history, there have been many Bitcoin [BTC] holders had no choice but to wait for a postponement. At one point it seemed that the worst was over.
Is your portfolio green? look at the BTC profit calculator
But almost every time it seemed that way, another retracement occurred. Therefore, the broader crypto market cap has found it challenging to take itself out of the $1 trillion range.
Lately, Bitcoin has recovered $27,000 and has maintained this level until the time of writing. However, Santiment revealed that there could be another correction, as market participants could be involved in a new round of profit-taking.
Brilliant potential for BTC
But on the plus side, whales have been accumulating BTC and Tether [USDT]. Typically, Bitcoin accumulation favors an upward trajectory.
When the accumulation of stablecoins like USDT increases, it also means that market players have large purchasing power, which could be beneficial for BTC in the long run.
📊 The long-term prospects are bright #Bitcoin while the whales pile up $BTC & $USDT. However, expect a near-term correction with traders’ profits riding high as it hit $27K on Thursday. When the 7D MVRV falls below 0, it can be ideal for the next step up. https://t.co/oBSTRGumui pic.twitter.com/sO0S9SX7aS
— Santiment (@santimentfeed) September 29, 2023
One metric used to assess Bitcoin’s long-term prospects is the market value to realized value ratio (MVRV). The MVRV ratio is the ratio of a crypto asset’s market capitalization to its realized value.
While it helps provide information about traders’ buying and selling behavior, it can also help identify tops and bottoms. At the time of writing, the seven-day MVRV ratio had increased to 1.96%. This was due to the recent increase in the price of BTC.
However, a price correction could reduce the benchmark to zero. If this happens, the whales and stablecoin holders will be lurking could be increasing buying pressure on BTC. This would therefore lead to a new price increase.
Another indicator to pay attention to is dormant circulation. At the time of writing, Bitcoin’s 90-day dormant circulation had fallen to 3,147. The metric takes into account the activity of coins that have not moved for a long time.
Source: Santiment
The decline in dormant circulation means that most long-term owners have refrained from selling. If it stays that way, so can Bitcoin to perform excellent in the coming months/years.
Long term holders are equipped and ready
Interestingly, the 90-day Mean Coin Age (MCA) for Bitcoin has been the same increasing since August. The MCA is the average value of all coins on the blockchain, weighted by the average purchase price.
One explanation for this increase is that market participants have significantly stored Bitcoins in cold wallets.
In the absence of notable movement in BTC value, this can be interpreted as a sign that holders are sufficiently equipped to engage in major trading activity when the bull market returns.
Source: Santiment
How many Worth 1,10,100 BTC today?
Andrew Kuznetsov, co-founder and CTO of Islamic Coin, spoke to AMBCrypto about Bitcoin’s potential. According to Kuznetsov, the April 2024 halving could push Bitcoin to a new all-time high. He said,
“The halving, expected in April next year, together with potential macroeconomic shifts such as the adoption of spot Bitcoin ETFs and a rate-cutting cycle from major central banks, sets the stage for a promising 2024.”