When these data hit new highs, Bitcoin soared 3.5 times. Will history repeat itself?

Bitcoin’s so-called “HODLwave” has hit a new all-time high. The indicator represents the number of bitcoins that have never moved on the Bitcoin blockchain over the past 12 months. It typically indicates that investors are gradually accumulating the dominant cryptocurrency.

Researchers at Cryptowatch, a crypto market data firm owned by U.S. exchange Kraken, wrote :

“Bitcoin’s 1-year HODL trend — the amount of Bitcoin that has remained untouched on the blockchain for the past 365 days — has hit a new all-time high of 63%. Bitcoin’s HODLwave Index is up 1% since the beginning of July.”

The last time such a large number of users spent Bitcoin without transferring it to other addresses was in early 2019. At that time, Bitcoin rose from about $4,000 to $14,000, recording a 250% uptrend.

Various on-chain indicators show that Bitcoin market sentiment is gradually improving

Bitcoin “HODLing” activity has been hitting new highs since late last month.

Alistair Milne, chief investment officer of Altana Digital Currency Fund, said on June 30 that the indicator reached 62%. He predicted that in the continued cycle, the indicator could peak at 70%.

Milne said :

“Holding coin for a year or more just created a new all-time high index of 62%. Similar levels of HODL index were last seen during a nearly three-month consolidation of a few hundred dollars before starting a two-year bull run. Guess this cycle will peak at 70%?”

In the month since then, the price of Bitcoin has risen from $9,187 to over $11,000 . At its peak on July 27, BTC rose to a high of $11,417 on spot exchanges such as Bitstamp.

In addition to HODLwave, other on-chain indicators and statistics show that market sentiment around Bitcoin remains positive. Market data firm Glassnode recently said that the number of Bitcoin addresses holding at least $1 million has surged to 18,000.

Statistics show that the visibility of new “whales” (investors who hold large amounts of Bitcoin) has increased in recent months.

Historically, when new whales buy Bitcoin, it leads to strong rallies.

For example, data from Glassnode shows that the number of new Bitcoin whales increased in December 2017 and July 2019. In those two months, Bitcoin exceeded $20,000 and $14,000, respectively.

Number of Bitcoin addresses with a balance of more than $1 million - GLASSNODE

Other data showing more volatility may emerge

On July 29, Grayscale Capital said that the company's assets under management (AUM) reached $5.1 billion. Accredited institutional investors in the United States typically gain exposure to Bitcoin through the Grayscale Bitcoin Trust. Grayscale Capital's record high holdings indicate that institutional participation in the cryptocurrency market remains high .

Daily trading volumes in the spot, options, and futures markets continue to rise, showing an increase in demand for cryptocurrencies. On top of exchange data, Ki Young-ju, CEO of on-chain analytics firm CryptoQuant, said that Bitcoin whales have begun sending Bitcoin and stablecoins to exchanges.

“Bitcoin whales are sending BTC to exchanges. #Stablecoin whales are also sending stablecoins to exchanges. This week will be a battle between stablecoin and Bitcoin exchange inflows. These inflows indicate underlying buy/sell pressure.”

The confluence of optimistic on-chain statistics, an overall increase in trading activity, and rising whale participation could further improve market sentiment surrounding Bitcoin.