Bitcoin On-Chain Analysis: 2021 Sees Year of Massive Consolidation for Bitcoin (BTC)

Bitcoin On-Chain Analysis: 2021 Sees Year of Massive Consolidation for Bitcoin (BTC)

Today’s on-chain evaluation summarizes 2021 within the Bitcoin (BTC) market, throughout which excessive volatility within the BTC value was mixed with macro consolidation and customarily sideways value motion. BeInCrypto compares the values of a number of key on-chain indicators from the start and finish of the yr.

The Bitcoin value is up 65.50% year-to-date and is closing in round $48,000. The proportion of provide in revenue is 72.79% as we speak. NUPL is at a key assist stage at 0.49. The quantity of BTC within the palms of LTH has elevated by 16%. The Bitcoin community’s hash fee as we speak is 168 EH/s and is barely beneath its ATH.

Annual development of BTC

Bitcoin (BTC) opened the yr with the worth of $29,000 and closes round $48,000. This offers an annual enhance of 65.50% or $19,000.

Meanwhile, the most important cryptocurrency has reached two main peaks (orange). The first was reached on the stage of $64,895 on April 14. The second reached the extent of $69,000 on November 10 and represents the present all-time excessive (ATH). Today’s value is due to this fact 30% beneath the ATH.

BTC chart by Tradingview

In basic, Bitcoin has been in a big consolidation within the $29,000 – $69,000 vary all through 2021. This resembles a parallel channel with a median at $49,000. At the identical time, the market skilled excessive volatility as buying and selling moved from channel resistance, by way of the median, to assist and vice versa.

Interestingly, the macro backside reached in the summertime, in the course of the May-July interval, additionally reached the $29,000 stage with which BTC began the yr. In distinction, the year-end shut could be very close to the median of the channel, round $48,000. This signifies a constructive year-long consolidation during which excessive volatility went hand in hand with sideways value motion.

Percent Supply in Profit

Percent Supply in Profit is an indicator that measures the quantity of cash whose value over the last transfer was decrease than the present value. At the start of the yr, as many as 99.29% of Bitcoins in circulation have been in revenue (blue line) and the BTC value was $29,000. Values within the 87-100% vary endured by way of the primary months of the yr till reaching April’s ATH.

Bitcoin Percent Supply in Profit by Glassnode

However, the following drop within the BTC value was adopted by a pointy discount within the provide in revenue. At the time of reaching the summer season low, solely 65.82% of Bitcoin was in revenue (grey space). Further up, the chart once more moved upwards to method 100% close to the November ATH.

Today, 72.79% of the provision is in revenue and that is comparatively low for the yr (pink line).  Despite the BTC value oscillating round $48,000, the provision in revenue indicator is reaching ranges from round May-July. Perhaps it is a bullish sign pointing to a different interval of accumulation.


Net Unrealized Profit/Loss (NUPL) is the distinction between relative unrealized revenue and relative unrealized loss. It may also be calculated by subtracting the realized market capitalization from the market capitalization after which dividing the outcome by the market capitalization.

The annual NUPL chart offers an attention-grabbing perception into the BTC market and matches into the narrative of long-term consolidation. First of all, the worth of the indicator firstly of the yr was 0.68 (blue line) and on the finish it was 0.49 (pink line). For most of the yr, the indicator was within the inexperienced perception/denial vary between 0.5 and 0.75.

NUPL chart by Glassnode

Interestingly, regardless of a 65.50% enhance within the value of BTC, the worth of NUPL is down 0.19. In different phrases, the market has a bigger unrealized loss as we speak regardless of the worth of Bitcoin being increased than it was firstly of the yr.

Further, it’s value noting that the annual peak of NUPL was 0.75 on February 21 (blue circle). This quantity is essential as a result of all earlier peaks within the BTC value have coincided with values above 0.75, i.e. within the blue euphoria/greed vary. So far on this cycle, this vary has not been reached.

At the identical time, NUPL’s one-year low was 0.35 on July 20 (pink circle). This studying remained within the yellow optimism/nervousness space regardless of the robust correction within the BTC value. At the top of the yr, the NUPL is pointing to the borderline worth of 0.49, the place it was final positioned in September. A possible return to the inexperienced space above 0.50 might be an indicator of the continuation of the bull market and the upkeep of the bullish long-term consolidation.

BTC provide distribution

A recent report from Glassnode incorporates a chart that compares the provision of Bitcoin within the palms of long-term and short-term holders (LTH and STH), the quantity of BTC on exchanges and the so-called sovereign provide. The latter is outlined as all cash outdoors the reserves of exchanges.

According to the chart, the previous yr introduced a change within the ratio between LTH and STH in favor of the previous. LTHs at the moment maintain 13.33 million BTC, and the provision of these holding cash for greater than 155 days elevated by 16% year-to-date. STH, however, maintain 3.01 million BTC on the finish of the yr and their provide has decreased by 32%.


The quantity of so-called sovereign provide is as we speak at a brand new all-time excessive of 16.34 million BTC. In distinction, exchanges maintain 2.56 million BTC as of the top of the yr.

Overall, the change in provide between LTH and STH suggests a small switch of BTC in the direction of long-term holders. This behaviour has traditionally been noticed throughout bear markets, the place cash transfer from weak palms to robust ones. The knowledge additionally matches with our speculation of a protracted one-year accumulation and consolidation of the Bitcoin value in 2021.

Hash fee

The ultimate on-chain indicator value taking a look at within the 2021 abstract is hash fee. This is a basic indicator of the well being of the Bitcoin community, which measures the common quantity of hashes per second produced by miners.

Like Bitcoin’s value, the hash fee closes the yr at a better 168 EH/s stage than it opened it at 143 EH/s stage on January 1. However, the well being of Bitcoin’s community skilled its largest ever drop in hash fee, which occurred between May 13 and July 2, when the hash fee bottomed out at 84 EH/s (pink circle).

Hash Rate chart by Glassnode

Despite the dramatic occasions surrounding the mine closure in China, the community rapidly recovered its mining capability. As not too long ago as December, the hash fee reached a brand new all-time excessive at 182 EH/s (inexperienced circle) and closes the yr at 168 EH/s.

This is one other on-chain indicator that 2021 was the top of a large development, correction and subsequent macro consolidation. Despite this, the Bitcoin community is in wonderful form, international decentralization and mine distribution is rising, and miners are nonetheless all in favour of mining BTC.

For BeInCrypto’s newest Bitcoin (BTC) evaluation, click on right here.


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