Bitcoin is down 5% today, but blockchain data is bullish

Bitcoin is down 5% today, but blockchain data is bullish

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Analysts and on-chain data firm Glassnode are finding positive Bitcoin indicators despite today’s modest price pullback.

Key points

  • Bitcoin is trading today.
  • The on-chain metrics suggest a bullish use case for Bitcoin going forward.

According to CoinMarketCap, at the time of writing, the price of Bitcoin (BTC) is down 5.5% this morning. Today’s strong jobs report could stoke fears that the Federal Reserve is more likely to raise interest rates to curb inflation when it meets in mid-March.

Despite this modest pullback, other data suggests positive upward trends for Bitcoin.

High transfer volume between Bitcoin wallets

Some analysts believe that Bitcoin continues to prove itself as a solid store of value compared to other assets. A few days ago, the cryptocurrency was trading at a 40% premium in Russia as citizens searched for a way to preserve the value of their funds as the Russian ruble fell more than 30%.

In its daily note to email subscribers, crypto research firm Delphi Digital said the supply of Bitcoin moving between digital wallet addresses over a 24-hour period has spiked to around 565,000 Bitcoin. “This is the highest level seen in over a year. In fact, only two events saw higher activity: Black Thursday in March 2020 and May 2020. The supply of Bitcoin held by smaller addresses (0.001 – 10 BTC) saw a sharp rise, which may be the result of capital flight from the ruble to bitcoin,” Delphi’s note states.

This high transfer volume suggests that more users are considering Bitcoin as an attractive alternative to depositing funds in a traditional bank or fiat currency. These factors could contribute to a price prediction of $50,000 per Bitcoin by the end of March, according to Nigel Green, CEO of financial services company deVere Group.

Record number of Bitcoin wallets with balances

Another interesting data point comes from on-chain analytics website Glassnode, which reported this week that the number of digital wallets holding some amount of Bitcoin hit an all-time high of 40,276,163. a Bitcoin balance increasingly hold their coins. According to Glassnode, the amount of BTC circulating supply last moved three to five years ago and reached a four-year high of just over 2.8 million BTC. Both of these metrics suggest that more people are holding Bitcoin than ever before and are holding it longer once they acquire it.

This discussion is not financial advice, and each investor should do their own research and ensure they only invest what they can afford to lose. However, given that Bitcoin has a supply cap of 21 million coins, the data noted here seems to indicate long-term upward price trends for this asset.

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