Possible BTC bull run as $18B worth of Bitcoin accumulated at $30,200.
Possible BTC bull run as $18B worth of Bitcoin accumulated at $30,200.
The Growing Demand for Bitcoin: 592,000 Coins Bought at $30,200
The blockchain industry continues to attract attention as a record-breaking 592,000 Bitcoin, valued at approximately $17.8 billion, was accumulated when the coin was trading at $30,200, according to recent data from Glassnode. This accumulation rate suggests a possible increase in demand, with more entities purchasing Bitcoin at the second-fastest pace in the network’s history. The only previous record was broken when 637,000 BTC were bought at an average price of $16,500.
This significant spike in Bitcoin accumulation at the $30,200 price point coincided with a United States court ruling that XRP, an altcoin issued from the XRP Ledger (XRPL), is a commodity, similar to Bitcoin. The ruling, received positively by the crypto community, temporarily lifted prices and helped sustain Bitcoin above the psychological $30,000 mark.
Understanding the Bitcoin Entity-Adjusted Economic Ratio Per Day (ERPD)
To assess economic activity within the Bitcoin network and analyze the number of entities participating, Glassnode developed the Bitcoin Entity-Adjusted Economic Ratio Per Day (ERPD) metric. This metric takes into account the Network Value to Transactions (NVT) ratio and the entity-adjusted on-chain volume.
The NVT ratio is a measure of the relationship between market capitalization and recorded on-chain trading volumes at a specific price point. A higher NVT ratio indicates a greater value than recorded trading volumes. However, this metric can be misleading if it fails to consider the entities or clustered addresses involved in transactions.
To address this concern, the ERPD integrates addresses involved at a specific price point, thus accounting for the market cap. This adjustment provides a more accurate gauge of the entities and total coins involved in Bitcoin transactions.
Shifting Sentiment: Impact on Altcoins
The surge in Bitcoin ERPD development is expected to have an impact on altcoins as well. Bitcoin’s liquidity and widespread support across the crypto market make it a significant influencer of market sentiment for other altcoins. The performance and transactions of Bitcoin can serve as indicators of the overall market sentiment, potentially influencing how altcoins are perceived under current market conditions.
While the increase in Bitcoin ERPD may be seen as a positive development by some, others on Twitter express concerns about potential price crashes. They believe that many of these transactions are conducted by “paper hands” – investors who buy Bitcoin when the price rises and are quick to sell at the first sign of negative news.
Additionally, the spike in ERPD precedes the Bitcoin halving event scheduled for 2024. Historical data suggests that halving events have a positive impact on prices, often triggering bull runs. After the halving, miners receive fewer coins, resulting in a reduced supply for circulation. This supply shock has the potential to support Bitcoin prices and contribute to a bullish market sentiment.
In conclusion, the recent accumulation of 592,000 Bitcoin at the $30,200 price point highlights the growing demand for cryptocurrencies, particularly Bitcoin. The development of the Bitcoin Entity-Adjusted Economic Ratio Per Day metric provides insights into the economic activity within the network, considering the entities and total coins involved in transactions. As the blockchain industry continues to evolve, Bitcoin remains a key influencer of market sentiment, impacting both altcoins and the overall market conditions. With the upcoming Bitcoin halving event in 2024, the potential for positive price movements and a bull run remains a possibility, further adding to the excitement and opportunities within the blockchain industry.
Bitcoin price on July 16 | Source: BTCUSDT on Binance, TradingView
