Bitcoin Update: Older Coins Are HODLING, But Bull Market Is Not Over
May 7, 2024
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Exploring Bitcoin's near-term price action, macro factors, and why smart money is holding onto their coins. The discussion covers Coin Days Destroyed, excess savings, spending behavior, and Bitcoin's historical performance for future outlook.
Despite current consolidation, macro factors support Bitcoin's positive outlook.
Analysis of on-chain behavior suggests a potential market peak, complementing ongoing price correction.
Deep dives
Bitcoin's Price Action Analysis
Bitcoin is currently experiencing a 10-week correction where buyers and sellers are battling it out in the market. Despite the tumultuous price action, the macroeconomic factors suggest a positive outlook for Bitcoin. The Federal Reserve's dovish pivot and the upcoming election year contribute to a supportive environment for asset prices, including Bitcoin. This period of consolidation presents a phase where buyers can potentially drive Bitcoin's price higher.
On-Chain Behavior and Coin Days Destroyed
Analyzing on-chain behavior through metrics like Coin Days Destroyed reveals insights into investor behavior. Rising Coin Days Destroyed indicates older coins moving and potentially being spent, signaling a market top. However, historical trends show that market peaks may still be ahead even with increasing Coin Days Destroyed. This behavior complements the ongoing price correction, suggesting a redistribution of assets among holders.
Macro Economic Factors and Bull Market Trends
Pandemic-era excess savings in the US have dwindled, impacting consumer spending and potentially influencing risk asset prices. The slowdown in spending could act as a headwind for assets like Bitcoin in the short term. However, the Federal Reserve's likely easing response to economic slowdowns may support financial markets, mitigating potential downside risks. Understanding historical bull market drawdowns and Bitcoin's price appreciation post-halving indicates the resilience of Bitcoin's long-term growth amidst short-term market fluctuations.
In this video, Joe walks through 4 bitcoin charts and 1 chart about excess savings. He breaks down the near-term price action and why we have been consolidating for 10 weeks in a row, the broader macro factors at play for the rest of the year, why the smart money have taken profits but are now holding onto their coins, and why you should zoom out and observe that the bull market is likely not even close to finished just yet.
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