For the time being, Bitcoin is trying to stay afloat between $30K to $40K price points. There has been sufficient technical headway for the emergence of bullish trend revival. Willy Woo, the pseudonymous crypto analyst, claims that the undermined supply crunch could signal the ultimate supply shock in the market. The supply shock is the measure of diamond hands against weak hands.
Woo claims that the HODLers are countering the selling pressure that whales have generated due to massive sell-outs since February. With the help of quoting a histogram, he quotes that a similar pattern was visible in Q4 2020. Back then, the expert investors were debating whether Bitcoin could prove to be a good enough store of value in the post-COVID-19 economy. Eventually, the price value went through the roof and forged a new path that leads in a different direction than stocks.
The Number of Active Users on the Bitcoin Network is at an All-time High
The data projections from Glassnode indicate that number of active addresses for Bitcoin has moved up to 32,000 users per day on average. It can be witnessed on the network user growth metric for Bitcoin that the last peak point was forged in 2018. At its highest, the number of active users rose as much as 40K before coinciding with the price.
According to Woo, the investors are not abandoning the network, but they are rather busy buying from the dip. Meanwhile, Petr Kozyakov, CEO and co-founder of Mercuryo, posits that Ethereum might give Bitcoin a run for the money. He connects the estimated supremacy of Ethereum on the successful deployment of the London hard fork. He further explained that when the sky clears out from the collision of two crypto giants, Bitcoin will find itself sitting at $50K.
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CryptoQuant aggregator suggests that the outflows from the Bitcoin networks have breached 60K for the very first time during the entire year. On the other hand, the numbers of Bitcoin that are imported on the exchange platforms are as low as 20K. Such a scenario is interesting considering that states like UK and China are imposing a regulatory clampdown on Bitcoin.
The rise in withdrawals is translated into the fact that investors want to hold the cryptocurrency in long positions. The supply crunch and the increased buying pressure could result in a new bullish wave caused by the HODL sentiment. It is worth noting that for different geographical locations, the outflows and inflows are varied.