Report: Is Bitcoin Now a Safe Haven?
With uncertainty over the Federal Reserve’s interest rate decisions, on-chain data revealed continued optimism in the Bitcoin (BTC) market, and Galaxy noted in a new report that many expect the price of the flagship coin to rise further.
In its latest report, titled “Bitcoin Data Shows Bullish Basis”, digital asset research firm Galaxy found that the price of BTC has risen by over 45% since the Silicon Valley Bank closed on March 10. While many are waiting for the coin to come to the $30,000 price zone, positive emotions are driving the market.
According to Galaxy, BTC’s correlation with the traditional stock market has declined since the start of the banking crisis. Interestingly, its correlation with gold sharply increased over the same period. This is largely a positive thing for BTC, as gold is often viewed as a safe-haven asset. The increase in correlation shows that BTC is also seen as a store of value or a hedge against economic uncertainty.
“This correlation data shows that, at least recently, Bitcoin has indeed been performing as a safe-haven asset rather than a risk asset.”
While BTC remains a significantly volatile crypto-asset, its volatility is slowly decreasing over time. According to data from Glassnode, while the coin’s annual volatility increased following the collapse of SVIB, it has been somewhat stable since then.
The increase in the percentage of BTC’s total supply held in profit could be a factor that has contributed to the growing optimism among BTC holders in recent weeks. In its report, Galaxy found that the current supply of BTC held in profit has reached 75%, the highest level since April 2022. A significant portion of the supply was obtained in the $15,500 – $17,000 and $18,000 – $25,000 range, and the output profit ratio (SOPR) spent above 1 for the first time, indicating that traders are starting to dispose of coins they have acquired at a lower price. it could be. This could possibly signal a re-entry into a bull market phase.
“Many addresses just bought Bitcoin. Besides, they didn’t spend any at all. The number of addresses called savings addresses has increased over the past month.”
Finally, the supply of BTC on exchanges has steadily decreased over the period under review. Galaxy has found that BTC balances held at addresses on cryptocurrency exchanges have dropped to their lowest level since March 2018. A drop in exchange reserves could be a bullish sign, indicating fewer coin sales are taking place.
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