Shocktober 2021 crypto on-chain digest

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TL; DR Breakdown

  • Most cryptocurrencies have been on a surge in October, with bitcoin hitting a record high.
  • There is potential for a sustained bullish characteristic in BTC, and it might surge further.

Cryptocurrencies have been on a wild ride; September saw them underperform. However, October came as a shocker. Bitcoin broke records and reached new heights.

As forecasted in September’s Crypto On-Chain Digest, data shows that a supply shock led to Bitcoin’s price rising to a new ATH.

In this article, Kraken Intelligence analyzes the impact of Bitcoin’s supply shock and how whales are leading the charge. They also discuss why metrics from on-chain activity suggest that there’s still a lot more potential for growth in BTC.

HODLer’s Paradise

Bitcoin’s HODL waves paint a picture of holders who aren’t ready to give up their coins yet. September’s defect and October’s might have done little in the way of moving traders.

The drop in the rate of young coins has been happening, but things are getting worse. The dive is mainly attributed to increased volatility. And a lack of interest from traders who want long-term gains.

Diamond-handed miners

Bitcoin mining is a competitive and complex process. Yet, it appears that miners will be holding onto their Bitcoin for the long term. A 0-hop supply tells us if validators have hoarded pools after they’ve mined coins. If this metric remains at zero, then there must still exist more new bitcoins being created each day.

It’s been an interesting few months for cryptocurrency. With the rise in value, more people are mining and trying to get their hands on it. Again, there is also a notable decrease among those who mine using pools, which could mean two things. Either they took profits before selling off large amounts, or this trend might not be over yet because small miners can’t keep up with demand.

Bulls on Parade

Bitcoin is enjoying a solid run, but it still has some work to maintain its position as the top cryptocurrency. A recent survey of investors found that many are long-term holders. Others bought when Bitcoin was worth 10 dollars or less than two years ago, which helped put BTC into this bull market.

The SOPR is a measure of whether market participants are selling at a profit or loss. This recent bounce has given us an answer by approximating that solid support for Bitcoin comes in around $42,000. It would appear that there was not much more upside left with previous moves from September 2020 showing lower levels (about 38k). It also confirms how healthy the pullback following such a rise was, and it does not mean we should expect another move back up right away. However, some time will need to pass before price action stabilizes again.

The Market-Value-To-Realized Value Zscore estimates whether bitcoin is in oversold or overbought territory. Sitting below the halfway point between these two thresholds, suggesting there’s still room for its price to go up.

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