Bitcoin whales, entities holding between 100 and 10,000 BTC, have been accumulating the cryptocurrency at a rate not seen in over a decade, according to data from on-chain analytics firm Glassnode. This trend, coupled with other bullish indicators, has led some analysts to believe that Bitcoin may have reached its price bottom and could be poised for a recovery in the coming months.
The number of Bitcoin whales has been steadily increasing since the beginning of 2023, reaching a 10-year high of 2,100 entities. This suggests that large investors are confident in Bitcoin's long-term prospects and are taking advantage of the current low prices to increase their holdings.
"The last time we saw this level of accumulation was in 2013, when Bitcoin was trading at around $100," said one analyst. "This is a strong signal that whales believe Bitcoin is undervalued and that the price will rise in the future."
In addition to whale accumulation, other on-chain metrics also point to a potential bottom in Bitcoin's price. The Puell Multiple, a metric that measures the value of newly mined Bitcoins relative to the 365-day moving average, has recently crossed below 0.5, which has historically been a reliable indicator of a market bottom.
"When the Puell Multiple falls below 0.5, it typically signals that miners are capitulating and that the market is in a state of fear and uncertainty," explained another analyst. "This is often followed by a period of price recovery."
Furthermore, the Bitcoin Fear and Greed Index, which measures market sentiment on a scale of 1 to 100, has been hovering in the "extreme fear" territory for several months. Historically, when the index has reached these levels, it has been followed by a price increase.
Despite these bullish signals, some analysts caution that Bitcoin's recovery may not be immediate or without volatility. The macroeconomic environment, including rising interest rates and geopolitical tensions, could continue to put pressure on the cryptocurrency market in the short term.
"While the on-chain data looks promising, we can't ignore the broader economic factors that are influencing the market," said one analyst. "It's possible that Bitcoin could experience further downside before a sustained recovery begins."
Nevertheless, the accumulation by Bitcoin whales and other positive on-chain metrics suggest that the cryptocurrency may be nearing a bottom. As the market continues to evolve, investors will be closely watching for signs of a turnaround in Bitcoin's price.
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