Glassnode: The growth of giant whales has slowed down, and Bitcoin on-chain indicators and prices have shown strong support

Bitcoin Market Health

Bitcoin saw a decent price increase last week, starting the week at $10,650 and ending up 6.6% higher at $11,360. After last Saturday’s surge, BTC found stable support above $11,000 for the first time since August.

Bitcoin on-chain fundamentals grew slightly last week. The Glassnode index rose by 2 points to 63 points. This was mainly due to the rise in the market sentiment index, which grew significantly last week, up 15 points from the previous week. At the same time, the decline in liquidity indicators prevented the index from showing a high increase .

Bitcoin’s network health saw a modest increase this week, up 3 points to 69. This increase was due to growth in Bitcoin’s total hashrate and growth in the network transaction activity subcategory, as the number of new entities joining the Bitcoin network grew and the frequency of on-chain transactions began to accelerate.

The largest gainer was the investor sentiment subcategory, which rose by 24 points as the price of Bitcoin rose and the supply of Bitcoin profits increased, as well as MVRV ( a relative indicator, the ratio of circulating market value to realized market value, the MVRV ratio indirectly reflects the imbalance between the supply and demand of Bitcoin in the secondary market, and thus can reflect the degree to which the market price is undervalued or overvalued. )

Glassnode Compass

The compass remains in the bullish first quadrant. If Bitcoin can stay in the green zone for another week, it will mark the first time in nearly two years that Bitcoin has spent half a year in the bullish zone.

As usual, the rise in Bitcoin prices over the past week has followed the rise in the stock market, reaffirming Bitcoin’s correlation with traditional financial markets. This growth has been seen across the entire cryptocurrency market.

Meanwhile, Bitcoin’s on-chain fundamentals have grown stronger over the last week, with the Glassnode index reaching its 11th-highest score of 2020. As we previously reported, Bitcoin is well positioned for a breakout if it can shake its strong correlation with the stock market.

Altcoins’ performance against Bitcoin

Altcoin performance relative to Bitcoin was mixed. As a general rule, blockchain protocol tokens such as ETH and BCH showed less movement, while utility tokens such as BNB and LINK were more volatile.

LINK and BNB reversed their trends from the previous week; LINK gained 6.5% over the past week, while BNB lost 7.7% against Bitcoin.

Performance against the US dollar

All other altcoins except BNB have seen growth against the dollar over the past week, especially at the end of the week. LINK is the best performing altcoin, up 13.6%, surpassing Polkadot DOT and reclaiming the seventh most valuable crypto asset. Meanwhile, BCH surpassed BNB and ranked fifth, surpassing BNB.

Although Bitcoin is up 6.6% year-to-date, its market share actually fell slightly on the week as other crypto assets recover from last week’s brutal correction.

The growth in the number of Bitcoin whales is slowing down

The number of Bitcoin whales (entities holding at least 1,000 BTC) has been growing consistently throughout 2020, showing a similar trend to 2012 and 2014-15. However, since early September, the number of whales has actually begun to decline — the first drop since late 2019.

Historically, the beginning of a decline in the number of Bitcoin whales has often signaled an increase in retail investor interest and the beginning of a market swell. This trend goes against popular belief, which generally assumes that a decline in whales and selling pressure leads to a drop in prices.

Although the current decline is slow and still in its early stages, it could signal the start of another bull run. Investors should keep a close eye on this indicator to see if Bitcoin’s price will follow historical trends associated with a decline in the number of whales.