Tuesday, November 24, 2020
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Bitcoin Investors Going From ‘Hodl’ to ‘Sell’

It’s been another heavy day for all markets around the world. Unless the U.S. acts, a government shutdown will occur, further demoralizing markets and consumer moral. On top of that, concerns over another European and American lock-down grows as COVID cases ramp up. Will we continue to see panic selling as time goes on? If so, what are the indicators telling us bitcoin price will fall as well?

Bitcoin Market Weakens

Data provided by Chainalysis shows a massive movement in bitcoin from wallets to exchanges, signifying intention to sell. Philip Gradwell, an economist at the research firm has said, “since Sept. 20, the net daily inflow of bitcoins to exchanges have been increasing and trade intensity has been declining.” He concludes by saying that this is a clear sign that the bitcoin market is beginning to weaken. If holders are unwilling to hold, then the selling pressure will be too much for institutional buyers to come in and keep prices around $10k.

Another key metric provided by Chainalysis is the bitcoin trade intensity. This measures the number of times an inflowing coin is traded. The higher the number, the more buyers there are to take whatever sellers are willing to give. This metric has fell to a one-year low of 1.75, a clear sign that there aren’t enough buyers to absorb the massive inflow of coins.

Bullish Long-Term

Although bitcoin and global markets will suffer in the short-term, there is hope for bitcoin’s future. Bitcoin’s 200-week moving average is showing a price floor of $6,600 with a $200 increase each month. This gives us an idea of what bitcoin’s worst-case scenario could be if we have another meltdown like we did in March. The chart below, provided by PlanB, shows a strong case that investors will no longer see bitcoin prices lower than $6k.

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