For most investors the driving force for investing in Bitcoin is profits. They buy to make profits and exit if they fail/succeed in their mission. This is one of the biggest reasons why we see fluctuation in holders day in day out. But how could you know if it is the right time to enter the market though? Look for a strong buy signal like the one below.
But first, how are Bitcoin holders doing?
The short-term holders’ supply in profit just recently dropped to yearly lows of 20%. This level has been witnessed previously multiple times since 2015. The price fluctuation witnessed in the last 5 months has resulted in less than 20% of all short-term holders’ BTC being transacted within the last 5 months.
The fluctuating price movement even cased panick among some long-term holders who are known to hold their Bitcoin, regardless of what happens in the market.
Coin Days Destroyed measures the movement of all coins and consequently shows us how old the coins were based on their last movement. The spike visible on the chart indicates that 69.8 million days were destroyed yesterday.
However, a majority of the short-term holders sat through the same fluctuation which led to a rise in mid-term holders. Their hold over all supplyrose from 8.3% to 19.2%. However, these mid-term holders were actually not in losses as such.
These mid-term holders basically represent investors who bought BTC between 6 to 12 months. Considering their exit within the 3-month period occurred only recently, it puts their purchase time around March. Since then the price has only dropped by 3%.
So when would be the right time to buy?
Every time the STH supply sees a low it leads to accumulation and it has been the case since 2015. This was also the last time short-term holders fell, to represent only 23% of all holders (ref. STH-supply chart above).
As for the entry level of investment, $50k seems too far away at the moment. But $45k is a much more of a real level for BTC to reach by the end of the month.
The Relative Strength Index (RSI) is already rising, close to the neutral line which was last witnessed around July 21. And we had a rally after that. Presently, there is no indication of a rally, but breaching $45,000 is possible. A close above that would be the right time to begin accumulating again.