Bitcoin Holds Firm at $30,000: Evidence of BTC Re-Accumulation?
- BTC’s value has grown by 91% since its November 2022 price lows.
- The peak drawdown in 2023 has been just -18%, indicating a strong demand for BTC.
- Active address momentum has started to increase again in the last few months.
Price Consolidation and Re-Accumulation
Bitcoin [BTC] is currently consolidating at the $30,000 “mid-point” price, potentially signaling a re-accumulation phase. According to on-chain data provider Glassnode, the peak drawdown in 2023 has been just -18%, which is remarkably shallow compared to all prior cycles. This suggests that there is a strong degree of demand underlying the asset. BTC’s recovery from its bear market lows of November 2022 has also been remarkable, with its value rising by 91%.
Inscriptions Impact On-Chain Activity
Inscriptions have had an impact on on-chain activity within the Bitcoin network. Inscribing led to a surge in BTC network activity when it first emerged, typically seen as a positive signal of growing adoption and a healthy network. However, as inscriptions declined, active address momentum started increasing again in the past few months. This indicates that it was simply due to significant address re-use by inscription traders rather than any real decline in Bitcoin network activity.
Bull Market Corrections
Glassnode assessed the depth of bull market corrections so far this year and found that they have been much shallower compared to previous cycles. This implies that investors continue to show confidence and resilience despite price volatility and fluctuations experienced during 2021–22 cycle so far. The report concluded that this could be attributed to Bitcoin’s ability to remain relatively stable even during periods of high volatility or rapid price movements – further evidence that Bitcoin is finding acceptance among traditional investors who are looking for an alternative store of value asset class.
Conclusion
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This analysis provides further evidence that despite short-term fluctuations and corrections in bitcoin prices throughout 2021–22 cycle so far, long term investors are showing confidence in cryptocurrency markets through their continued accumulation activities. With active addresses beginning to climb again after inscribing traders exit the market coupled with other bullish indicators such as low drawdown levels seen thus far indicate continued accumulation going forward into next few months