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Long-term stability and retention insights
Bitcoin (BTC) price has been trading consistently in the $67,000 and $68,000 range for several days. In this analysis, BeInCrypto aims to understand Bitcoin’s price action.
Furthermore, we observed a drop volatility, which can be attributed to several factors. To provide a comprehensive analysis, we will explore who is buying and selling Bitcoin.
Examining Bitcoin Activity and Vault Rates
The chart below illustrates Bitcoin’s activity rate and bounce rate over time, along with its price in US dollars. Here are the key observations from the chart:
Activity rate (shown in red):
The Activity Rate shows how much Bitcoin is actively traded or moved by usersindicating how often people use or transfer their BTC.
Notable spikes and dips indicate periods of rising and falling activity among Bitcoin holders. Significant fluctuations may be observed, especially around major price movements. We saw a fascinating drop in the activity rate, from 9% to -3%. This decrease in activity may indicate a tendency towards long-term Bitcoin ownership.
Skip rate (shown in green):
Vault Rate shows how many Bitcoin users are switching to long-term storage, keeping it safe for the future (Vault Supply represents the percentage of Bitcoin that has been held or has never been sold since its first acquisition).
Positive vault rates suggest investors are moving more BTC into long-term storage. The chart shows periods where the bounce rate increases, potentially indicating holders’ confidence in the future value of the asset.
See more information: Who owns the most Bitcoin in 2024?
Bitcoin: Vaults and activity fees. Source: Glassnode
The decline in activity and the increase in the vault could explain the decreasing trend in volatility.
Understanding the UTXO Value Distribution Monitor
The UTXO (Unspent Transaction Output) Value Distribution Monitor analyzes BTC transactions based on the value of BTC held in different wallets. Let’s summarize in simple terms and explain what this indicator tells us.
What is UTXO?
UTXO means Unspent transaction output. Refers to the amount of Bitcoin received after a transaction that can be used in future transactions. In essence, UTXOs define where each blockchain transaction begins and ends.
What does the UTXO value distribution monitor show?
The colored bars represent daily changes in the amount of BTC held at different UTXO value bands:
- Red Bars: Changes to UTXOs with more than 10,000 BTC.
- Violet Bars: Changes to UTXOs holding between 1,000 and 10,000 BTC.
What does this indicator tell us?
The UTXO Value Distribution Monitor helps us understand the behavior of BTC holders, from small investors to large whales (very large holders). Here’s what it can tell us:
Accumulation and Distribution:
Positive changes mean more BTC stays at this value band. For example, if the red bars (10,000+ BTC) are positive, large holders accumulate more BTC.
Negative changes indicate that BTC leaves this value range. Therefore, if the blue bars (1,000 – 10,000 BTC) are negative, medium-sized holders sell their BTC.
Market Sentiment:
If large holders (more than 10,000 BTC) accumulate, it suggests they have long-term confidence in the value of Bitcoin.
If mid-sized holders (1,000 – 10,000 BTC) are selling, they can take profits or reallocate their assets.
Market Dynamics:
The interaction between different value ranges can indicate broader market trends. For example, if we see 1,000 – 10,000 BTC holders selling and over 10,000 BTC holders buying, this suggests that the market Big players are confident in the future of Bitcoin at current prices, even if small players are less certain.
See more information: Bitcoin (BTC) Price Prediction 2024/2025/2030
In summary, Bitcoin’s price stability in the $67,000 to $68,000 range, coupled with declining volatility, suggests a maturing market. The drop in the activity rate and the increase in the jump rate indicate a shift to long-term participationreflecting increased confidence among major holders.
The UTXO Value Distribution Monitor further supports this, showing large holders accumulating BTC while mid-sized holders sell. These trends point to a market where major players are optimistic about the future of Bitcoin, reinforcing its potential as a long-term investment.
Disclaimer
In line with the Confidence Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate and unbiased reporting, but market conditions are subject to change without notice. Always conduct your own research and consult a professional before making any financial decisions. Please note that our Terms and conditions, Privacy PolicyIt is Disclaimers have been updated.