Blockchain data analytics platform Glassnode reported that there has been a sudden switch of capital as FTX collapsed. Coins have been transferred from long-term holders towards a new cohort of buyers, causing a change in hodl patterns that has been seen in previous cycles. This could be an inflection point, indicating a change in the market, says Glassnode. Although Bitcoin prices were affected by the CFTC crackdown on Binance and this week’s fake Interpol news, they have managed to bounce back. However, the market is still in consolidation.
ICYMI: The current structure of the #Bitcoin RHODL ratio suggests a notably abrupt rotation of capital starting as FTX collapsed, with coins transferring from long-term holders, towards a new cohort of buyers.
This sharp decline in the RHODL Ratio can be seen in prior cycles to… pic.twitter.com/uiBw8u0DAF
— glassnode (@glassnode) April 4, 2023
Bitcoin Cycle Shift
Glassnode announced on April 3 that it has introduced a RHODL metric that compares the wealth held by single-cycle Long-Term Holders (6m-2y) to the youngest Short-Term Holders (1d-3m). The current structure, which is in steep decline, suggests BTC is transferring from long-term holders to short-term holders, a pattern that accelerated following the demise of FTX. The Market Value to Realized Value (MVRV) ratio is currently at 1.4, “which aligns more closely with a recovery phase,” says Glassnode. An Accumulation Trend Score also implies that markets are in a transitional recovery phase. Glassnode used an Illiquid Supply Net Position Change metric to measure the net flow of coins to and from wallets with little to no history of spending. This is increasing by 36,600 BTC per month, which suggests increased confidence in the asset. “This aligns with our prior observations related to the HODLers, and provides additional evidence to a case of continued confidence in market sentiment, despite the backdrop of regulatory pressure,” it said.
BTC Price Outlook
Bitcoin prices have gained 2.7% on the day to reach $28,629 at the time of writing, returning to a weekly high and ignoring all of the negative news and regulatory pressures. The Bitcoin fear and greed index has slipped into ‘greed,’ implying that a correction may be near. Although BTC has surged 28% over the past month, it still lags 58.5% from its all-time high of $69,000 in November 2021.
Bitcoin Fear and Greed Index is 62 — Greed
Current price: $28,211 pic.twitter.com/8A6sfuLXzw
— Bitcoin Fear and Greed Index (@BitcoinFear) April 4, 2023