Sentiment in the market has been downright good for a few weeks now. The recovery of the prices has started and the period of chaos and panic seems to be for the time being behind.
On-chain data
According to the data analysis company Glassnode, this sentiment is also reflected in the on-chain data. The company has taken a close look at investor buying and selling patterns.
In a report released on Monday, Glassnode states that these patterns bullish to be. This is because less is sold and more is held. Even ‘young’ coins are currently being sold less quickly.
#Bitcoin and #Ethereum have held into gains last week, despite a slow-down in on-chain activity.
This week, we assess this divergence for both chains, as well as analyse what appears to be a supply squeeze in the making.
Read More in The Week On-chain????https://t.co/2ywRfrmiYl
— glassnode (@glassnode) August 30, 2021
According to Glassnode, young coins are coins purchased by investors less than three months ago. At times of volatility, these are usually also the coins that are the first to be sold by the same investors, often at a loss.
At the moment, the share of young coins has been falling sharply for a while. This means that the share of, for example, bitcoin (BTC) bought more than three months ago is increasing.
“Young bitcoins represent only 15% of the total supply and there is a solid downtrend going on.”
For the second largest cryptocurrency, ethereum (ETH), a similar pattern is visible. In ethereum, only 12.5% of total circulation was purchased by investors less than three months ago.
This downward trend has been visible since June. This gives rise to the suspicion that fewer and fewer cryptocurrencies are sold. If less is sold by investors, that is of course a bullish signal for the course.
The number of bitcoin addresses is also reason for optimism, according to Glassnode. The number of addresses that bitcoin has on its balance sheet is growing rapidly. There are currently about 38 million bitcoin addresses that actually contain bitcoin. This is almost as high as the all-time high in May this year.
–
