Key Points
- About 311,000 wallets exited the Bitcoin network in the last 10 days due to price correction.
- The 30-day MVRV ratio suggests potential for more gains for Bitcoin.
Bitcoin’s price nearly reached $68,000 again, however, on-chain data revealed significant exits following a prior correction. Our analysis shows that about 311,000 non-zero addresses exited the Bitcoin network in the past 10 days.
Exit Triggered by FUD
The exodus appears to be a result of Fear, Uncertainty, and Doubt (FUD) as prices dropped. However, those familiar with the market can confirm that this departure should not incite panic.
Instead, it presented an opportunity for whales to purchase cheap BTC at the expense of those with “paper hands.” Furthermore, data from Santiment suggests that Bitcoin typically benefits from such scenarios.
For example, between September and October 2023, 1.10 million non-zero addresses left the network, resulting in a 28% price increase. Similarly, some addresses departed between 21st January and 13th February, but the price of BTC later rose by 24%. Currently, Bitcoin shows a 3% negative 10-day performance.
Future Predictions
If history repeats itself, Bitcoin could potentially reach $83,000 in the coming weeks. However, it’s also crucial to consider BTC from another perspective.
The Market Value to Realized Value (MVRV) ratio was examined, which typically reflects the average profit or loss of all cryptocurrencies currently in circulation. It also indicates whether an asset is at fair value or not. Currently, the 30-day MVRV ratio is 2.487%, suggesting that BTC holders were significantly impacted by the recent correction. However, at such a low ratio, the value of Bitcoin has the potential to climb higher.
On a seven-day basis, on-chain data shows a decrease in Bitcoin circulation. Currently, the circulation is 427,000, almost 50% down from what it was on the 11th of March.
This decrease in circulation could mean that BTC might experience less selling pressure, which could result in an appreciation of the coin’s value.
There has been a shift in the short-term sentiment around Bitcoin, inferred from the analysis of the Short Term Holder- Net Unrealized Profit/Loss (STH-NUPL). The STH-NUPL serves as an indicator of the behavior of short-term investors. As of now, the STH-NUPL has returned to the hope-fear territory, implying investors’ skepticism about betting on a price increase. However, this also indicates a slight decrease in greed, suggesting that the market is not overheated. If this remains the case, the coin price might rise higher than $67,631.
