Three metrics of Bitcoin's sustainable demand
Bitcoin's continued consolidation around the $30,000 level over the past month is raising more and more questions about the price direction in the near future. Let's look at three metrics demonstrating strong demand for cryptocurrency, which could eventually lead to a price increase.
Realised cap (RC)
RC is calculated by both the average price and the price of the last movement of each coin. When the indicator rises, it shows that coins are being bought at increasingly higher prices and that demand is increasing. In 2023, RC amounted to $396 billion, demonstrating sustainable, though not explosive, growth after reaching the local bottom.
For more clarity, let's look at the realised cap drawdown indicator. The 2022 collapse was the second largest, and the drawdown reached 18.8%. Cap recovery is proceeding at the same pace as in previous cycles at a rate of 0.1% per day.
Coins without movement
The greater investor confidence in future growth is, the stronger the hoarding sentiment is. The share of coins remaining unmoved for over a year reached a record of 69%.
Despite a price increase of 82% in 2023, the realised value (profit + loss) is only $290 million daily. This is the indicator of 2019 and 2020, showing low activity and investor unwillingness to part with coins at current prices.
Institutional investors represent a group of the most cautious participants, relying on macroeconomic trends and the Fed's monetary policy. Expectations of the latter's reversal due to lower inflation in the US led to an increase in investments in crypto ETFs. Over the past four weeks, an inflow of $742 million was recorded, an amount not seen since Q4 2021. 95% of it is due to interest in Bitcoin.
In a recent interview, Laurence D. Fink, Chairman and Chief Executive Officer of BlackRock, said that cryptocurrencies would eventually surpass any national currency in valuation due to their international nature.
StormGain Analytical Group
(platform for trading, exchanging and storing cryptocurrency)