- Bitcoin holders continued to show confidence in the king coin.
- Miners also became hopeful, as evidenced by Bitfarm’s investment.
Bitcoin [BTC] has remained steady around $37,000-$38,000 despite increasing hopes for a move towards $40,000. However, this has not dulled the optimism of BTC enthusiasts in the slightest.
High on momentum
Bitcoin is experiencing strong momentum, coinciding with substantial holding positions. Signs of profit-taking are visible, especially among Short-Term Holders (STH), who historically have an impact on prices despite being marginal liquidity holders.
Long-Term Holders (LTH) are also holding, implying a potential superficial price decline, but indicating realized gains.
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Strong momentum coincides with strong holding positions
Signs of profit taking are becoming apparent (from STH cohort). Despite STH being the marginal holder of liquidity, their decisions have historically impacted the price
Main signs for
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— NeuroInvest Research (@Neuro__Invest) November 27, 2023
These observed trends, with their strong momentum and significant profit-taking under STH, suggest a nuanced impact on Bitcoin.
Long-term vs. short-term holders
If LTH continues to hold its position, BTC may experience price stability, which could potentially limit the depth of price declines. This could act as a buffer against major market declines.
However, the signs of realized gains, especially at STH, indicated some caution in the market. This does not change the long-term (LT) theorem for Bitcoin. However, it does suggest that profit-taking activities can influence short-term price movements.
Source: Neuroinvest Research
This trend mainly affects ST positions and does not change the LT thesis. An increase in the ratio implies that coins become less inactive on average in the short term than in the long term.
Another model assessed how long coins remained unused in wallets, measuring the ‘age’ of coins since their last move. Another metric, Mean Coin Age, gauged “aggregate temporal structure,” which highlights a preference for movement over holding over the past 30 days.
The Coin Days Destroyed (CDD) indicator provides a subtle picture by multiplying the number of coins in a transaction by the number of days since it was last spent.
This provided insight into both the volume and age of currency movements. In particular, there is a decreasing amount of available BTC, because the king coin has shifted in the chain over the years.
This ongoing supply imbalance, in addition to the anticipation of the halving and ETF approval, can only lead to small price declines.
Bitcoin miners are going all-in
AMBCrypto noted that mining companies also became hopeful around BTC. According to recent data, Bitfarms, a global Bitcoin mining company, has placed an order for 35,888 Bitmain T21 miners at $2,660 each.
This move aligns with the company’s strategy to secure hardware for 17 EH/s by the second half of 2024, and 21 EH/s by the end of 2024. Expected improvements include lower unit production costs, increased efficiency, and substantial hashrate growth.
In addition, the plant in Paso Pe, Paraguay plans to increase production in the first half of 2024, from 50 MW to 70 MW. This expansion, along with improvements on other farms, aims to rapidly grow hashrate to 12 EH/s, a 90% increase from November 27.
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Another development in Yguazu, Paraguay, is expected to contribute significantly to organic growth in the second half of 2024, targeting an initial capacity of 80 MW with the deployment of 70 MW of new high-performance miners.
The large amount of money being poured into mining rigs shows the high level of hope shown by mining companies. Only time will tell if their bets will pay off. At the time of writing, BTC was trading at $37,335.79 and the price had fallen -1.15% over the past 24 hours.
Source: Santiment
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