Bullish New Buyers Swarm Bitcoin, BTC, and the Macro Relationship

An expected recovery rally has occurred for Bitcoin prices after a month of consolidation around $20,000. Interestingly, this coincides with the peak of the previous cycle in 2017.

Short-term momentum remains supportive, while longer-term macro indicators suggest that a solid foundation may last.

Bitcoin’s 66% decline against its ATH has largely driven away speculators, leaving only whales and those with strong convictions to hold back.

However, a recent trend has seen short-term holders flock to the $20,000 region, where ownership is shifting from vested sellers to more optimistic buyers.

Source: Glassnode

At the same time, holders who have accumulated coins in the past six months have refused to liquidate their positions despite heavy unrealized losses, suggesting that they are less sensitive to market fluctuations.


Source: Glassnode

The analysis of many Mayer, a multiple of the current price of Bitcoin on the 200-day moving average, it fell below 0.55 at the extreme of this price correction, which shows that the market is selling 45% of discount compared to 200DMA. Cryptocurrency prices have historically formed cyclical lows below this level, but this is rare, occurring less than 3% of the time.


Source: Glassnode

Currently, Bitcoin appears to be eclipsing the level after its low for a while. This shows that the worst of the cryptocurrency bear market is likely over, if history is any guide.

There is also an interesting interaction when LTH’s cost base exceeds the total cost base for the broader market (the realized price). In order for LTH RP to increase, LTHs must purchase coins above their base cost or wait for higher coins to mature beyond 155 days. This is rare during a bear market.

The realized price rose above the LTH realized price during the market downturn, continued strength and sufficient demand to offset profit taking. Historically, bear market divergences have lasted between 248 days and 575 days. A relatively short period of 17 days is in effect for the current cycle, a relatively short period of time.


Source: Glassnode

BTC price is determined by Macro – No doubt

Although we would like BTC to be independent of traditional markets and macroeconomic indicators, this is not currently the case. With the arrival of large institutional players and their significant liquidity, this trust has intensified. Thus, the behavior of digital assets is influenced by global flows.

This is why the M2 money supply, which includes physical silver, deposits, and “less liquid” money, including bank savings accounts, can be a leading indicator of the action of the Bitcoin price.

A comparison of the global deviation trend of M2 with cryptocurrency market capitalization reveals the following:



Additionally, as we often see at ChangeNOW, the prices of the S&P 500 and Bitcoin are highly correlated. From a broader perspective, the S&P is driven by the combined balance sheets of major central banks. In general, the rise of the S&P 500 is associated with the expansion of central bank balance sheets, and the same is true for Bitcoin.


Source: Yardeni.com

So, you can get an idea of ​​the Bitcoin future by looking at the aggregate chart of the central bank’s balance sheet.

At the end of the line

By analyzing the on-chain activity of Bitcoin, at ChangeNOW we can see that long-term owners, who are less affected by BTC price fluctuations, never leave the market, while short-term speculators lost in recent sales, allowing for more optimism. buyers. walk inside. Meanwhile, by looking at the global liquidity flowing from the major central banks, we can get an idea of ​​what is happening to the price of Bitcoin, as well as what is coming in the near future. It doesn’t matter if you are a strong long-term bull, a capitulating seller, a new buyer, or just a bystander from afar, we all need to understand the logical side of this trend. chaotic cryptocurrency market.

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