After hinting at recovering later on Monday, Bitcoin managed to regain its perch above $20,000 and hold atop that level through mid-week. This relief gain comes after Bitcoin lost over 37.9% of its value in June making it its worst monthly price performance since 2011.
In the past two or so weeks, the price had been consolidating around 2017’s $20k all-time-high as investors absorb the shocks of the previous month. The defence put up by bitcoin bulls above the $20,000 psychological level this week, however, hints at the underlying strength of bitcoin bulls – an aspect that has been supported by various on-chain findings.
This week, data from crypto-centric on-chain analytics firm Glassnode showed that despite weak price-action through June, Bitcoin had been withdrawn from exchanges at the most aggressive rate in history.
“Total exchange outflows in June peak at -151k BTC/month, with Shrimp and Whales as main receivers,” wrote Glassnode in a weekly note. “This is in stark contrast with the flood of coins into exchanges that occurred in May-June 2021.” Overall, Coinbase and Binance led in withdrawal rates with both firms recording close to 800k BTC in outflows over the last two years.
This metric is complemented by the major change in illiquid supply. In July illiquid supply( the movement of coins towards wallets with no history of spending) increased sharply by 223K BTC. According to the firm, this is also the largest Exchange Net Position Change on record since June 2017.
The firm also noted a striking similarity between the proportionality of Bitcoin supply in the loss of coins held outside exchanges this week with the November 2018 and March 2020 capitulation phases. “The proportion of Bitcoin supply in loss has hit 48.1% of all coins held outside exchanges. Of these $BTC in loss, almost 60% of them are held by Long-Term Holders (28.6% of total).” The firm wrote. Both metrics are at similar levels to the Nov-Dec 2018, and March 2020 capitulation phases.
With Lackluster on-chain activity taking a toll on investors, the current bear market phase has also weeded out “crypto tourists,” leaving only the strongest hands. All these factors have been synonymous with previous Bitcoin final capitulation phases and have mostly preceded massive bull runs.
As of writing, BTC is flirting with $20,854 after gaining 4.20% in the past 24 hours while its competitor Ethereum is up 7.54% to $1,216. The global cryptocurrency market valuation has also managed to recuperate and is currently sitting at $936 billion after a 3.67% increase in the past day according to data from CoinGecko.