‘Demand for #Bitcoin Appears Strong as Ever’, Says On-Chain Analyst

Recently, pseudo-anonymous on-chain crypto analyst “Dilution-proof” used data from crypto analytics startups CryptoQuant and Glassnode to show that despite Bitcoin’s recent price corrections, there is still strong demand for Bitcoin.

He started by saying that what was even more bullish than the Bitcoin price bouncing back at the end of last month was that that “this rise was accompanied by large exchange withdrawals.” Furthermore, this price increase “was not accompanied by a rise in funding rates, which is a sign that it was spot-markets driven.”

12/27 Perhaps an even more comforting thought; this last price rise was not accompanied by a rise in funding rates, which is a sign that it was spot-markets driven

The apes that went long & got rekt are now either on the sidelines or learned their lesson and bought spot 🧠 pic.twitter.com/VUC5pdO2Wt

— Dilution-proof 🥕🟩 (@dilutionproof) May 1, 2021

He also points out that since the market crash that occurred in March 2020, BTC balances on crypto exchanges have been steadily decreasing.

15/27 A similar pattern can be witnessed at the balances of Over The Counter (OTC) trading desks

The supply shortage is real; there is a decreasing amount of coins circulating on the market, which means that price must go up to entice HODL’ers to sell

Chart via @mskvsk 🎩 pic.twitter.com/bY4QNPD6Vs

— Dilution-proof 🥕🟩 (@dilutionproof) May 1, 2021

On the supply side, he says that since late March, miners have been “accumulating” rather than taking profits; furthermore, he says that “HODL’ers are not selling.”

18/27 The answer is clear; if not for newly created #bitcoin, existing coins need to become available to the market to meet the new demand

The problem is with that is that HODL’ers are not selling – they are buying 😯

Again, chart via @WClementeIII 🎩🍺 pic.twitter.com/cgRRgaDyDe

— Dilution-proof 🥕🟩 (@dilutionproof) May 1, 2021

He goes on to say that another sign of demand is that “the stablecoin reserves on spot exchanges are currently relatively high, which is potentially a signal that dry powder is ready to buy the next dip – or perhaps FOMO in if price runs away from them.”

21/27 Another encouraging signal that demand is lining up: the stablecoin reserves on spot exchanges are currently relatively high, which is potentially a signal that dry powder is ready to buy the next dip – or perhaps FOMO in if price runs away from them 😬 pic.twitter.com/pLmNStspBd

— Dilution-proof 🥕🟩 (@dilutionproof) May 1, 2021

DISCLAIMER

The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.

IMAGE CREDIT

Featured Image by “petre_barlea” via Pixabay.com

   

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