Bitcoin OKX and dYdX cryptocurrency exchanges and crypto analytics website CoinGlass. Positive funding rates suggest that speculators are getting bullish and suggest that long traders are funding short traders.
nail in Bitcoin The funding rates come in the wake of the cryptocurrency’s latest price surge, which saw it print an eight-month high of $25,270 on Thursday, down from as low as $21,300 earlier this week. Bitcoin It has since recovered to the upper $23,000, but is still up more than 8.5% on the week. The jump in the price of the last few days has also led to a spurt in liquidation Bitcoin According to CoinGlass.com, futures short positions.
The recent jump in price and subsequent hike in margin funding rate comes against the backdrop of a continued jump in new Bitcoin Investor. At least, that is the conclusion that can be drawn by analyzing trends in the distribution of BTC ownership among wallets, that the number of wallets with a small BTC balance (presumably retail investors) is growing at a rapid clip.
Can New Investors Drive Up The Price Of Bitcoin?
According to crypto data analytics platform Glassnode, the number of bitcoin wallet addresses with non-zero balances has recently risen above 44 million for the first time. This growth was driven by an increase in the number of wallets with unexpectedly small BTC balances. So-called “plankton” addresses with less than 0.01 BTC recently hit an all-time high above 32.6 million.
The number of so-called “shrimp” addresses, defined as holdings under 1 BTC, also recently hit a new high of over 43.2 million. This suggests an influx of new investors, which could help drive the recent gains seen in bitcoin.
Historically, the balance of BTC wealth during bitcoin bear markets has potentially concentrated in the hands of high conviction investors. When this BTC wealth concentration begins to reverse, it has been an early indicator that a new bitcoin bull market is starting and new investors are returning to the market once again. This trend can be seen in Glassnode’s Real HODL ratio indicator.
The RHODL ratio takes the ratio between coins that are 1 week and 1-2 years old (i.e. when the coins were last minted). When it rises, it suggests that more coins are in circulation, suggesting an influx of new buyers. When it falls, it suggests that coins are accumulating in wallets that are no longer willing to sell, which usually happens when weak-handed investors sell to strong-handed investors during a bear market.
As can be seen in the chart above, the recent downward and temporary reversal in the BTC wealth balance is a sign that there may be a bottom for bitcoin for this cycle. Bitcoin bulls will be hoping that the influx of new investors can continue to propel the price against mounting macro headwinds.
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