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At the time of writing, Bitcoin was trading at $ 18,092, having recovered from a dip that took it below the crucial level. If BTC closes above $ 18,000, it will do so for 2 consecutive days, having been 4 days since the price first crossed $ 18,000 since the heyday of the bull run.
In light of Bitcoin’s performance, on-chain analysts are monitoring metrics such as the supply of Bitcoin to exchanges, spot trading reserves, and the number of active addresses. However, while monitoring the number of active addresses signals rising demand, it may or may not involve active participation by retail traders.
Even with one million active addresses, if the balance is less than 0.1 Bitcoin, the data provided to the metric may not be enough to predict price movements. Ergo, the number of active addresses holding 1K + coins is a better metric, than the first. While addresses holding more than 10,000 coins are labeled as whales and are primarily mining pools, institutions or trading wallets, the 1k + coin metric is reliable for predicting price movements.
The number of active addresses with a balance greater than 1k provides a clear picture of the sentiment of traders and the direction in which the price could move next. Also, in relatively medium volume exchanges, traders who own 1k + Bitcoin wallets are more active in determining the price of the cryptocurrency.
The volume of spot trading on major exchanges, based on Skew data, is shown in the chart below,
BTC spot trading volumes || Source: Skew
While trading volumes have been under $ 500 million since November 20, 2020, addresses with 1k + coins only recently reached an ATH of 2257, a development that provides a clearer picture of accumulation in the charts.
BTC addresses with 1k + coins || Source: Glassnode
Most wallets with a balance greater than 1k BTC may eventually be miners and miners are known to sell mined BTC to cover operating costs. However, in recent times, enough has been said about HODLing in the mining community. This metric indicates that the price of Bitcoin may continue to rise north in the short term.
Another parameter supporting this is Tether’s offer on Santiment exchanges. The last time Tether’s offering percentage on exchanges rapidly rose to its current level, it returned in July 2020. Over the next two weeks, the price went up 28%.
It is noted that the price of $ BTC is foreshadowed by the offer of USDT on exchanges and currently the offer of USDT has decreased by 13%. The 2020 high was 44.84% in mid-March, followed by a nearly 50% drop in the price of Bitcoin which has become what we now know as Black Thursday.
Supply of Tether on bags || Source: Feeling
Simply put, this metric supports on-chain analysts’ predictions and conclusion from the number of active addresses holding 1k + Bitcoin. What is the forecast? Well, it’s bullish for Bitcoin, at least in the short term.
