This metric conveys Bitcoin is ready to take off
Over the last year, Bitcoin saw a dramatic surge to a new all-time high, beyond expectations and innumerous FUDs paving the way for regular dumps. Now as BTC completes 500 days post the last halving event and with prices making lower highs all through this month where can BTC’s price head from here?
Even though a large part of the market pins its high hopes on BTC reaching $100K by the end of the year with more than 11k call contracts open for that price level, for now, the more relevant question is whether Bitcoin will take an upward path from here on. Even though after the recent market shake-offs a considerable number of people panic sold, there were signs that Bitcoin is preparing for a run.
Return of Rick Astley Hodlers
The first sign of relief for BTC’s price was that Bitcoin still has around 35 days to go without a new all-time high before Bitcoin can beat its record of longest drawdown outside of a bear market. Additionally, a return of Rick Astley hodlers to the scene acted as a ray of hope for the king coin. BTC analyst, Willy Woo highlighted that ‘Bitcoin has entered the Never Gonna Give You Up phase of the Astley Cycle.’
Rick Astley hodlers are essentially strong hands who are ‘never gonna give up,’ instead Hodl coins and never let the balance of their sats go down. It is interesting to note that on April 13 when Bitcoin had blasted past $63K many, including Woo, had attributed that to ‘Rick Astley’ hodlers.
Bitcoin miners seem to be accumulating as the network hashing power made a close to 55% recovery from late June levels. In fact, since the lower levels seen at that time, the hash rate has made higher highs and higher lows. Further, miners have been accumulating since February and the accumulation trend resembles their accumulation seen earlier this cycle.
However, one worrying trend was the downtick seen in Market Cap to Thermocap Ratio. The ratio is basically the Market cap divided by Thermocap and is used to assess if the asset’s price is currently trading at a premium with respect to total security spend by miners. The ratio is adjusted to account for the increasing circulating supply over time.
Notably, Market Cap to Thermocap Ratio has been on a decline since September 7, which meant that BTC was now trading at the lowest premium (with respect to total security spend by miners) in all of September.
However, at the moment in terms of investment, it would be best to follow the trend and trust the ‘Return of the Ricks’ and Miners accumulation. The last time Ricks made an entry towards July beginning BTC prices consolidated and made a strong recovery. Moreover, with the market looking irresolute at the moment, and deciding upon a movement in any specific direction is not ideal but continuing to HODL would be good.