From the developments this week, it can be seen that although Bitcoin prices have recouped their October gains, they remain within a narrow range. As of the time of writing, the trading price of Bitcoin was $26798, fluctuating between the resistance level of $28000 and the support level of $26750
From the developments this week, it can be seen that although Bitcoin prices have recouped their October gains, they remain within a narrow range. As of the time of writing, the trading price of Bitcoin was $26798, fluctuating between the resistance level of $28000 and the support level of $26750. The almost stagnant price trend of Bitcoin has increased investor bias, leading to low trading volume and weak volatility.
BTC network activity continues to decline
The consolidation period of Bitcoin prices is accompanied by a significant decrease in deposits, withdrawals, and overall trading volume. Especially, all these indicators showed a significant increase during the Bitcoin boom in May. However, since September, they have started to decline significantly.
CryptoQuant's on chain data analyst MAC_ D emphasized the decrease in Bitcoin network activity and commented:
This is due to a decrease in new investments entering the cryptocurrency market, leading to a decrease in liquidity and volatility
The Reality of Bitcoin in the United States
The consolidation period of Bitcoin prices follows two conflicting market catalysts: the possibility of the US approving Bitcoin ETFs and concerns about the Fed's "longer, higher" interest rate strategy.
Analysts who expect the approval of Bitcoin ETFs to bring $600 billion in demand to the cryptocurrency market believe that this may trigger a rebound led by Bitcoin. In addition, the reality of inflation will continue to plague us, increasing the likelihood of the Federal Reserve maintaining future high interest rates and raising concerns about risky assets, including Bitcoin.
Whales are accumulating Bitcoin
In October, the number of Bitcoins held by whales and institutional addresses has increased. This indicates that the wealthiest investors trading in the cryptocurrency market are accumulating Bitcoin without using centralized exchanges. For example, the supply held by Bitcoin addresses with balances between 10000 and 100000 Bitcoins (blue line in the figure) has increased by more than 1% compared to the lowest level on October 5th.
One noteworthy aspect of this growth is the decrease in supply held by Bitcoin addresses with balances between 1000 and 10000 Bitcoins (orange wave). In addition, the number of Bitcoins held by wallets with balances between 100 and 1000 Bitcoins (green wave) has increased.
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