While writing this article, Bitcoin has rebounded to trade at $60,145, reflecting a gain of 0.6% in the last 24 hours. On weekly and monthly time frames, Bitcoin has posted a gain of about 4% and 3.5% respectively.
Trader Byzantine General has tweeted a fundamental and technical analysis report of the market. He states that Bitcoin has more way forward and detailed that in the last few days, the crypto’s price rally has been affected by the trend in the futures market.
The image underneath indicates a very high funding rate. Hence, traders having long positions will not have adequate incentive to retain their position. Byzantine General pointed out that there is a sharp rise in the count of bets in favor of Bitcoin, stating:
“However high funding is only dangerous when the market is driven purely by derivatives greed. But there is also a pretty damn strong spot bid. So maybe it’s not that problematic.”
Subsequently, Byzantine General announced the closure of Grayscale Bitcoin Trust (GBTC). In the final leg of 2020, the product created a huge rise in demand for Bitcoin and at the start of this year, there is not adequate participation.
Funding has been consistently pretty damn high in the past couple of months and it still is to this day.
This is bad for 2 reasons:
1. it’s expensive to be long
2. it shows that being long is the overcrowded trade— Byzantine General (@ByzGeneral) April 11, 2021
It is mirrored in cryptos performance. In the final week of April, Grayscale will unveil a big quantity of Bitcoin that forms the core of the product. During that period, a rise in the demand for crypto could be seen.
With respect to fundamentals, indicators signal further rally. The hash rate of Bitcoin and difficulty are near their peak with an intact uptrend, and so are miners’ profits, and the value of trades in US dollar. The trader said:
“(…) on-chain metrics suggest that we’re nearing overbought/euphoria levels. One of my favs is reverse risk which basically shows long term hodlers confidence. It’s getting pretty high but doesn’t scream “top” just yet.”
With respect to the mining industry, the trader assessed that miners no longer liquidate their rewards, resulting in a decrease in the availability of Bitcoin in the market. As a matter of fact, in the last few days, miners have begun to buy Bitcoin, which is regarded as highly bullish.
On the contrary, co-founder of Glassnode Rafael Schultze-Kraft studied the metric “Bitcoin’s Coin Days Destroyed,” utilized to assess the count of coins “spent” and opined that it is decreasing. Schultze-Kraft’s assessment matches with that of Byzantine General, implying that Bitcon has further way upside. He said:
Despite $BTC prices above $50k, 3-month CDD at low levels and recently declining. Old hands extremely strong here, HODLers showing conviction and doing what they do best.
1/ A thread on #Bitcoin miner metrics.
First, some fundamentals.
Bitcoin’s average hash rate hit a new ATH yesterday – crossing a daily average of 178 exahash / sec for the first time in history.
Miners keep spinning up machines – hash rate is up only.https://t.co/SEdtQGNsT7 pic.twitter.com/vIjVGyH8QC
— Rafael Schultze-Kraft (@n3ocortex) April 6, 2021
3/ #Bitcoin miners have been making more than $50 Million per day for the past month.
Put into perspective: A year ago this number was around $12 Million – that’s a 4x increase, despite the block subsidy being cut in half.
Important datapoint!
Chart: https://t.co/FWSYnFIGQT pic.twitter.com/CwNVRUWMln
— Rafael Schultze-Kraft (@n3ocortex) April 6, 2021
Eventually, academics firm Santiment said that there has been a rise in the count of whales holdings of over 100,000 Bitcoin. The percentage of whale addresses holding 100,000 Bitcoins or more has increased from 0.76% two weeks back, to 2.20% currently, reflecting a 11-month high. In the meantime, addresses holding 1000-100,000 Bitcoins have declined from 42.4% to 39.5% during the same period of 11 weeks.