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Bitcoin’s third halving event in its history is coming up next month, and it has everyone talking about the Bitcoin price.
A halving is when the number of new Bitcoin created by miners every ten minutes or so is cut in half.
One industry CEO recently referred to the upcoming halving as a “perfect storm” for Bitcoin, while blockchain data firm Coin Metrics released a report on why the event could lead to a short-term price decline that could build the foundation for future positive price movements.
Now, blockchain data and intelligence platform Glassnode has revealed multiple on-chain data metrics that indicate investors are optimistic about the halving’s potential effect on the Bitcoin price.
“In the weeks leading up to this milestone, a number of on–chain metrics are suggesting that investors agree with [the bullish sentiment around the halving] and are increasing their positions and hodling tight,” reads a recent Glassnode Insights post.
Data Shows Investors are Optimistic About the Bitcoin Price
While on-chain data can sometimes be difficult to assess in terms of the identities of users who are moving around their Bitcoin, Glassnode pointed out a few general trends related to activity on the Bitcoin blockchain in their recent post.
For one, 42.83% of the circulating Bitcoin supply has not moved in the last two years. This is a 10.4% increase from the same time last year, despite the sharp decline in the price that took place in the middle of last month. According to Glassnode, this data indicates long-term holders were not shaken by the crypto asset market’s decline in March.
“In addition, HODLer Net Position Change remained positive as BTC plummeted and, in the latter half of April, climbed to yearly highs suggesting that not only did long term investors hold steady – they capitalised on the discounted BTC and increased their positions,” adds the post from Glassnode.
According to Glassnode, on-chain data also shows that a large number of addresses that were active around the price crash in March have not remained active, which could mean that traders who bought the bottom are still holding onto their newly-bought coins.
“While this could also mean that the BTC sent to exchanges during the pandemonium has been static in their wallets since, exchanges balances have fallen by over 10% since the highs seen in February,” adds the Glassnode post. “Withdrawal of funds from trading platforms could further reinforce the idea of more bullish long term expectations from traders.”
Finally, there are also indications that interest from retail investors has risen, with the number of low balance Bitcoin addresses recently hitting new all-time highs. The data also indicates increased activity from whales, with the number of addresses with at least 1,000 Bitcoin in them on the rise. According to Glassnode, these whale addresses also appear to be accumulating more Bitcoin, as they did prior to the previous Bitcoin halving.
“Despite the instability and uncertainty in both traditional and crypto markets, on-chain metrics point towards an optimistic outlook from investors as the halving approaches,” adds the Glassnode post.