BTC/USD: On-chain Outlook, Edition #1 (24/05/21)

tl;dr: The number of large BTC wallets (1k-100k BTC holdings) have increased throughout the price correction. This could indicate that larger players have a macro bullish outlook on BTC, as they have added to their BTC stack.

See my analysis below:

1. Let’s examine BTC wallet distribution pre & post price correction:

This is where things get fascinating and is open to different interpretations. During the last 4 days, the number and proportion of wallet holders for 1k-10k BTC and 10k-100k BTC have increased. 

Interestingly, the 100-1k BTC holder band increased throughout correction, with it finally decreasing in the last 2 days. Typically, this can indicate two things:

i)  Either smaller fish (100-1k BTC holdings) bought the dip ‘too early’ and sold as the dump continued

ii) Larger wallets (1k - 100k BTC) offloaded portions of their BTC during the dump and ended up falling down into the 100 -1k BTC band

Overall, during the last 2 days, the total number and proportion of wallet holders for 1k-10k and 10k-100k have both increased during this price correction (see cream & red lines respectively in first chart).

2. BTC supply on exchanges versus inflow

We also have some notable changes in exchange inflows and supply.

BTC inflows into exchanges seem to be decreasing since the price correction (see orange circles in second chart). This combined with decreasing supply on exchanges, since the upward spike from 12/05, may indicate that sell side pressure for BTC is decreasing.

Thank you for reading. Let me know your thoughts below!


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