Bitcoin Soars

With Bitcoin soaring past its previous all-time high on Wednesday, October 20, we look at some on-chain stats that capture this moment in time. Data from Glassnode indicates early all Bitcoin addresses are in profit as of the end of Tuesday, October 19 – a whopping 99.94%. But how can this be given that Bitcoin fluctuates so much daily? It indicates that much of the action we are seeing is occurring on exchanges – whose BTC does not show up on the blockchain until it is withdrawn.

Driving Price Action

Another indicator that BTC currently held on exchanges is driving price action is “exchange net position change”, which is the 30-day change of the BTC balance on exchanges.  In the last several days, this has hovered closer to 0, indicating users are not sending BTC to exchanges or withdrawing from them, and marking a reversal of the recent trend of exchange outflows.

Market Value to Realized Value

The Market Value to Realized Value (MVRV) ratio has also gone above 2.75, a level that has preceded the start of past run ups in price, such as in December 2020.  This indicator is a measure of the market cap of Bitcoin and the realized cap (the last price at which coins were moved), and can be thought of as another measure of the profit Bitcoin holders are in. The peak of Bitcoin’s 2017 run coincided with MVRV of above 4.00, so this can be a guide on how far Bitcoin can rally.

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CrossTower Inc. provides this content for general information purposes, to better inform you on your digital asset investment journey. We do not provide investment recommendations or provide tax advice. Please consult your investment professional or tax advisor if you require assistance in these areas.

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