Cryptocurrency exchange Kraken is revealing one factor that could be responsible for powering Bitcoin’s (BTC) rally over the month of October.
In a new report, Kraken says that a supply shock trend, which shows no signs of slowing, might be one of the drivers behind Bitcoin’s rally this month.
“BTC has been priming itself for a supply shock thanks to further accumulation by long-term holders. This accumulation may be a driver for BTC’s recent move past $60,000. The latest on-chain data indicates that this supply shock trend is growing.”
Kraken says it is keeping an eye on the HODL waves metric, which shows the percentage of BTC supply that has remained dormant over a specific period. According to the report, long-term holders continue to accumulate Bitcoin despite its strength this month.
“Since May 24th, young coins have been maturing into the long-term holdings category at a rapid rate. During the nearly five-month period, old coins grew 10.9 percentage points to 51.6%, while young coins fell -11.8 percentage points to 25.49%, the lowest figure since November 2018 when BTC was worth roughly $5,700. In the last month, young coins ticked down another -1.57 percentage points, while old coins grew +1.48 percentage points. This tells us that long-term holders, who own most coins, continue to accumulate supply.
For this reason, the immediately marketable supply continues to dwindle – hence our observation that BTC may be experiencing a supply shock.”
According to Kraken, Bitcoin miners are also partly responsible for the supply shock.
“The largest public BTC mining firms in North America, including Riot, Marathon, Bitfarms, Hut8, Greenidge, Argo, and HIVE, have publicly reported that they are holding 20,459 [BTC} (~$1.25B), including 4,812 [BTC] (~$293M) of Marathon that it bought from the secondary market earlier this year...
Needless to say, mining pools are aligned with long-term holders in their bullish sentiment and represent a further contribution to BTC’s latest supply shock.”
The cryptocurrency exchange also says that a consensus is developing among market observers that long-term holders of Bitcoin expect the flagship crypto asset to go up as 2022 approaches.
“Despite BTC falling more than -15% in September and surging through October, long-term holders continued accumulating. Such leaves market observers to believe that long-term holders see further upside heading into a new year.”
You can read the full report here.
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The post This One Factor Is Contributing to a Bitcoin Rally – And It Has Not Abated, According to Crypto Exchange Kraken appeared first on The Daily Hodl.
source https://dailyhodl.com/2021/10/30/this-one-factor-is-contributing-to-a-bitcoin-rally-and-it-has-not-abated-according-to-crypto-exchange-kraken/