The vast majority of Bitcoin stock has not been touched since August, a sign that investors think the price will continue to rise, according to a report by Glassnode.
Currently, 12.9% of the Bitcoin offering is in circulation, or about $163 billion, is on exchange, according to the report. The trend started in August, when Bitcoin started to gain some bullish momentum after a period of falling prices.
Overall, Glassnode writes in his analysis, if investors were holding more of their Bitcoins on exchanges, it would be a sign that they thought it was expensive and wanted to be ready to sell. But that doesn’t seem to be the case.
Glassnode’s analysis revealed that daily net withdrawals from exchanges averaged 5,000 BTC. They write that “despite hovering just below ATHs, network activity remains only marginally above bear market levels“.
In other words, record prices didn’t drive many people to sell. Most investors are happy to HODL their Bitcoin, and Glassnode says this is a sign that many of them expect the price to continue rising.
Meanwhile, the rate at which new wallet addresses send or receive Bitcoin has increased significantly. As of Monday, November 9, the last day Glassnode recorded data, 516,914 new addresses had participated in a transaction. This represents a 72% increase from the number of newcomers sending or receiving Bitcoins in early August.
Today alone, the total number of Bitcoin addresses has surpassed 900,000 for the first time.
But that doesn’t necessarily mean that many new users or companies have entered the space. The Glassnode report goes on to say that the creation of new entities – clusters of addresses that the company’s algorithm estimates are controlled by the same network entity – has barely exceeded the rate normally seen during down markets.
This could be an indication that people are creating additional portfolios, perhaps so they can park their Bitcoin in interest-earning accounts, or hedge funds that already participate in crypto-active markets may be raising money from investors for new Bitcoin strategies .
“This observation of prices close to ATHs, while network activity is close to bear market lows, is a notable divergence.”
“It’s a compelling case where the market is probably still in the silent accumulation phase, punctuated by low activity, large currency outflows and very modest strategic spending by experienced holders.”