Summary
- 2 Bitcoin metrics suggest an optimistic upcoming price action for BTC.
- BTC is now trading above $56,000.
Despite Bitcoin’s September sluggish price, there are more important metrics that suggest optimistic upcoming price moves for BTC.
Bullish Metrics for Bitcoin
1. STHs Declines, LTHs Rise
The number of Bitcoins held by short-term holders has been declining since late May, according to the latest reports coming from CryptoQuant.
This indicates a weakening in demand, according to analyst Julio Moreno – CryptoQuant’s Head of Research. He also added that BTC long-term holders (LTHs) are accumulating in the face of this short-term holder capitulation.
He said that the opposite of this dynamic could play out if demand for BTC grows again, leading to short-term holders buying from long-term holders.
The analyst also highlighted charts that showed a notable shift in Bitcoin ownership dynamics. STHs (or the entities who hold BTC for 155 days or less) have reduced their positions, especially in July and August.
This dynamic could lead to medium-term price appreciation and market stabilization.
On the other hand, increased accumulation by LTHs could lead to price stabilization and place the market on track for a price rebound.
Also, he shared a chart showing that STHs are discouraged by volatility and attempting to reduce risk. LTHs positions rising suggests continuous accumulation.
2. Decreasing BTC Reserves and Rising Stablecoin Reserves
Another important bullish indicator is the decreasing Bitcoin reserves and rising stablecoin reserves – as the market supply tightens and buying power builds, we could be on the verge of an upcoming price rally.
The reduction in BTC reserves on exchanges signals reduced selling pressure, as investors move BTC to cold storage. Historically such movements were followed by price peaks.
Stablecoins on reserves on exchanges are increasing showing investors are preparing to buy.
The combination of these two indicators shows that the stage is being set for a bullish price breakout.
At the moment of writing this article, BTC is trading above $56,000, down by almost 1% in the past 24 hours.