With the Bitcoinon chain update we make a selection of what is happening on the BTC blockchain. Over the past 24 hours, the bitcoin price has fallen significantly below $67,000. What happened on-chain?
1. Winstname
Analyst Checkonchain sees that bitcoin holders are using the moment to take profits. The bitcoin price has been on the rise for a while and the peak at $73,000 has led a certain group to want to exchange their bitcoins for dollars or other fiat currencies. He uses a number of indicators. The Market Value Realized Value (MVRV) is the ratio between the value of the total bitcoin market and the total realized value. The realized value is the total of all bitcoin (in dollars), but the last known value on the blockchain.
A number is generated from this ratio, the so-called Z-score. The lower this score, so the closer the market cap is to the realized cap, the deeper the bottom of the market price is. At the moment, the Z-score is above 0.5 but below 1. This means a heated market, but not a boiled-over market. Participants who have been in the market for a longer time usually sell when the market has boiled over, because they have already waited patiently for a certain top.
“Net Realized Profit” refers to the difference between the profit realized on the sale of, in this case, bitcoin and the original purchase price, over a specific period and measured for the entire network.
Based on the “Net Realized Profit” indicator, it is possible to calculate what net profit has been realized at any given time. When the price hit $73,000, 352,000 bitcoins were exchanged for dollars. According to this analyst, profit taking is a normal consequence of an increased price.
A few of these folks have actually started taking profit, with the $73k peak aligning exactly with a cycle high Profit event of +352k $BTC
Profit taking is a normal part of #Bitcoin bulls, but it is a key factor in establishing resistance at local tops. https://t.co/5CHKWQHXTx pic.twitter.com/aqOcoJYcgJ
— _Checkonchain (@_checkonchain) April 2, 2024
2. Hodlers
The findings of fellow analyst Charles Edwards are in line with those of Checkmate. The “Hodlers Growth Rate” refers to the rate at which the number of individuals or entities holding bitcoin (hodlt) increases over a given period of time. The growth rate of hodlers can be measured by analyzing the number of new wallets holding bitcoin over a period of time, or the number of entities that do not sell their positions during market fluctuations.
Based on this “Hodlers Growth Rate” indicator, Edwards concludes that this metric shoots up so that the ‘diamond hands’, the extra strong hands of the long-term holders (hodlers), start selling.
In his view, that process has begun, because the line is rising, but there is still room before this indicator tops out. A value of 2 is normally a strong signal that there is an overheated market, typically a situation where hodlers start selling (in order to buy more bitcoins for the same dollars at a later time).
3. Hodler Growth Rate
This metric tops when Bitcoin’s diamond hands start selling into profit. That process has already begun. Cycle tops typically occur when HGR hasn’t made a new high in 6-9 months. But we are 3 months in now…
Watch it here: https://t.co/XXociz60in pic.twitter.com/UP9YeojwlM
— Charles Edwards (@caprioleio) April 2, 2024
3. “Mid-cycle”
According to analyst William Clemente, it is still far too early to talk about the end of a cycle. Based on a number of indicators, he judges that the price is now approximately “mid-cycle”. He looks at bitcoin’s performance since its lowest point in late 2022, when the price was around $16,000 per bitcoin. Furthermore, he sees that the Z-score has not peaked yet. The total number of stablecoins measured in dollars is also not yet at the top. In addition, the global liquidity level is still building up.
Currently no longer early, but somewhere mid-cycle pic.twitter.com/GvX0f1gTWT
— Will (@WClementeIII) April 2, 2024
Source: https://bitcoinmagazine.nl/nieuws/bitcoin-on-chainupdate
