Today’s chain analysis sums up 2021 in the Bitcoin (BTC) market, in which high BTC price volatility has been combined with macro consolidation and generally sideways price action. BeInCrypto compares the values of several key indicators in the chain of the beginning and the end of the year.
The price of Bitcoin is up 65.50% year-to-date and closes at around $ 48,000. The percentage of the offer in the profit is today 72.79%. NUPL is at a key support level at 0.49. The amount of BTC in LTH’s hands has increased by 16%. The Bitcoin network hash rate today is 168 EH / s and is slightly lower than its ATH.
Annual growth of BTC
Bitcoin (BTC) opened the year with a price of $ 29,000 and closes around $ 48,000. This gives an annual increase of 65.50% or $ 19,000.
Meanwhile, the biggest cryptocurrency has hit two major highs (orange). The first was reached at the $ 64,895 level on April 14. The second reached the $ 69,000 level on November 10 and represents the current record high (ATH). Today’s price is therefore 30% lower than the ATH.
In general, Bitcoin has seen significant consolidation in the $ 29,000 to $ 69,000 range throughout 2021. It looks like a parallel channel with a median at $ 49,000. At the same time, the market experienced high volatility as trade moved from channel resistance to median, then to support and vice versa.
It is interesting to note that the macro bottom reached in the summer, during the period May-July, also reached the level of $ 29,000 with which BTC started the year. In contrast, the year-end close is very close to the channel median, around $ 48,000. This indicates constructive consolidation throughout the year in which high volatility has gone hand in hand with sideways price action.
Percentage of supply in profit
Profit Supply Percentage is an indicator that measures the number of coins that were priced in the last move lower than the current price. At the start of the year, up to 99.29% of Bitcoins in circulation were at a profit (blue line) and the BTC price was $ 29,000. Values between 87 and 100% persisted for the first few months of the year until reaching the April ATH.
However, the subsequent decline in the price of BTC was followed by a sharp reduction in the supply of profit. By the time it hit the summer low, only 65.82% of Bitcoin was profitable (gray area). Higher, the chart moved up again to approach 100% near the November ATH.
Today, 72.79% of the offer is profitable, which is relatively low for the year (red line). Despite the BTC price hovering around $ 48,000, the profit supply indicator is reaching levels around May-July. Perhaps this is a bullish signal pointing to another period of accumulation.
Net Unrealized Gain / Loss (NUPL) is the difference between relative unrealized profit and relative unrealized loss. It can also be calculated by subtracting realized market capitalization from market capitalization and then dividing the result by market capitalization.
The annual NUPL chart provides an interesting overview of the BTC market and fits into the narrative of long term consolidation. First of all, the value of the indicator at the beginning of the year was 0.68 (blue line) and at the end it was 0.49 (red line). For most of the year, the indicator was in the green belief / denial range between 0.5 and 0.75.
Interestingly, despite a 65.50% increase in the price of BTC, the value of NUPL is down 0.19. In other words, the market has a larger unrealized loss today despite the higher price of Bitcoin than it was at the start of the year.
Additionally, it should be noted that the annual peak for NUPL was 0.75 on February 21 (blue circle). This number is crucial because all previous peaks in the BTC price have coincided with values above 0.75 i.e. in the euphoria / greed blue range. So far in this cycle, this range has not been reached.
At the same time, NUPL’s one-year low was 0.35 on July 20 (red circle). This reading remained in the optimism / anxiety yellow zone despite the sharp correction in the price of BTC. At the end of the year, the NUPL points to the cutoff value of 0.49, where it was last in September. A potential return to the green zone above 0.50 will be an indicator of a continuation of the bull market and continued bullish consolidation over the long term.
BTC supply distribution
A recent report from Glassnode features a chart that compares the supply of Bitcoin in the hands of long-term and short-term holders (LTH and STH), the amount of BTC on exchanges, and the so-called sovereign supply. The latter is defined as all the coins outside the exchange reserves.
According to the graph, the past year has brought a change in the ratio between LTH and STH in favor of the former. LTHs currently hold 13.33 million BTC, and the supply of those who hold coins for more than 155 days has increased 16% since the start of the year. STH, on the other hand, held 3.01million BTC at the end of the year and its supply fell 32%.
The amount of the so-called sovereign offer today reached a new all-time high of 16.34 million BTC. In contrast, the exchanges held 2.56 million BTC at the end of the year.
Overall, the evolution of the supply between LTH and STH suggests a small transfer of BTC to long-term holders. This behavior has historically been seen during bear markets, where coins move from weak hands to strong hands. The data also matches our assumption of a one-year prolonged build-up and Bitcoin price consolidation in 2021.
The last on-chain indicator worth considering in the 2021 summary is hash rate. This is a fundamental indicator of the health of the Bitcoin network, which measures the average number of hashes per second produced by miners.
Like the price of Bitcoin, the hash rate closes the year at a 168 EH / s level higher than it opened at the 143 EH / s level on January 1. However, Bitcoin’s network health saw its largest drop in hash rate, which occurred between May 13 and July 2, when the hash rate hit 84 EH / s (red circle).
Despite the dramatic events surrounding the closure of the mine in China, the network quickly recovered its extraction capacity. As recently as December, the hash rate hit a new all-time high at 182 EH / s (green circle) and closed the year at 168 EH / s.
This is another chain indicator that 2021 marked the end of massive growth, correction and subsequent macroeconomic consolidation. Despite this, the Bitcoin network is in excellent shape, global decentralization and mining distribution is increasing, and miners are still interested in mining BTC.
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