Chain Gang 8/7
It is safe to say that Bitcoin is back. Over the past week, BTC saw a high of nearly 45k with a low of roughly 37.5k. From a technical analysis perspective, a breakout to the 50k range is a possibility in the not-so-distant future. What sets this price appreciation apart from previous moments is the healthy growth taking place. In BTC’s past price run-up, many retail buyers began FOMOing into the asset in hopes of making a quick dollar. This explains the 3X in price in roughly 5 months. Trading volumes were not extremely high during this time period. On the contrary, the current growth can be seen coming from institutional investors, and long-term retail holders. Trading volumes have been higher, and stronger support levels are being established. The on-chain metrics show that volume is growing at these healthy levels, but that there is still more room to grow.
The URPD is the realized price distribution. This shows how much BTC has been moved at each price level. We can see that 31k-42k holds a bulk of the distribution level chart. This can be attributed to the ranging that took place within those levels for nearly 2 months. As touched on before, we can see that hardly any realized price distribution took place during the previous all-time highs. Forming healthy bars between the 42k-55k range would be beneficial for BTC in the long run, although it may not result in parabolic price action.
The spent output profit ratio (SOPR) is a metric that we look at often in these updates. As you can see, coins have been trading slightly above net profit recently. This metric has been extremely volatile as of late. A consistency above one in this chart would be an indication of a setup for new price discovery.
Miners continue to pile on the bullish sentiment by holding on to a significant amount of coins. Miner accumulation even grew over the past week, reaching levels seen in late March of this year.
The creator of the Stock-to-Flow model is doubling down on his stance and claiming that the bull run is by no means over. However, the price of BTC is sitting at nearly half of the model’s projections at the time of writing this article. The model shows that a price of around 99k should be present. On a more positive note, it appears as if price is trending back towards the model’s variance.
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