Cryptocurrency news – Bitcoin (BTC) on-chain indicators hit all-time lows; What's next for BTC price? The Bitcoin (BTC) price consolidation that has been going on over the last few weeks appears to be a process of volatility dropping to lows, signaling a never-ending wait for investors. As the BTC price continues to fluctuate in the $29,000 to $30,000 range, several on-chain indicators have reached a state of extreme irrelevance and exhaustion.
Let's take a look at some on-chain indicators that indicate a lack of sufficient strength for further upward price movement.
Limited Logins in Bitcoin
Realized Cap stands out as an important tool in on-chain analysis and reflects the total capital inflow since inception. The size and rate of change of Realized Market Cap offer important insights and show that over $16 billion (+4.1%) has entered Bitcoin this year.
However, the rise appears to be occurring at a relatively slow pace compared to the sharp increase seen in the 2021-22 uptrend. Although this shows that capital is entering, it suggests that it is happening at a relatively slow pace.
Bitcoin Volatility Squeezing
Bitcoin Bollinger Bands show that Bitcoin volatility has collapsed to historical lows. The upper and lower Bollinger Bands are separated by only 2.9%, this lower volatility squeeze has only been seen twice in 2016 and January 2023.
Another way to understand volatility decay (investor burnout) is by looking at how investors spend their money. In this context, Realized Value can be taken as a measure:
High Volatility: In situations where there is high volatility, investors often spend their money in coins that they acquire at higher (resulting in a loss) or lower (resulting in a profit) price compared to the current spot exchange rate.
Low Volatility and Exhaustion: In times of low volatility (times when investors are exhausted), most of the coins moving on-chain are likely to be acquired at prices very close to the current spot rate. This means that the profit or loss realized is minimal.
Sell Side Risk Ratio is a useful tool to monitor this. This ratio compares the absolute value of realized profit or loss (change in asset value) against realized capital (overall asset value). For short-term holders (KVS), this ratio is currently at an all-time low.
This indicates that almost all traders looking to make a profit or loss in this price range have already done so. As a result, the market could possibly need a catalysis to encourage new spending, which could signal impending volatility.
Long Term Bitcoin Holder Supply
The amount of Bitcoin held by Long-Term Holders is constantly increasing and has reached a record high of 14.6 million BTC. In contrast, the supply held by Short-Term Holders fell to a very low annual level of 2.56 million BTC.
In summary, this shows that Bitcoin investors maintain strong belief, as very few choose to sell their holdings.$
