- Whales, or major Bitcoin investors, have recently begun taking substantial long positions on Bitcoin, particularly on popular exchanges like Bybit and HTX around the $69,000 mark.
- The significance of these large long positions is reminiscent of similar patterns observed in August 2023, which preceded a steep ascent in Bitcoin’s price from approximately $25,000 to over $73,500.
- Ki Young Ju, CEO of CryptoQuant, highlighted these movements, noting that Bitcoin’s current price is not overvalued when assessed against network fundamentals, which include the Thermo Cap ratio.
Bitcoin whales are making strategic moves again, taking sizable long positions just as they did before significant price surges, suggesting potential bullish momentum.
Whales’ Expansive Long Positions: An Indicator of Incoming Bull Run?
In recent developments, large-scale Bitcoin investors have opened notable long positions at the $69,000 level via renowned cryptocurrency exchanges Bybit and HTX. This strategy echoes similar moves made in August 2023, which heralded a rapid price increase for Bitcoin. The historical precedent indicates that these whales may be anticipating another substantial price hike.
Understanding the Thermo Cap Ratio in Bitcoin Valuation
Ki Young Ju emphasizes the crucial role of the Thermo Cap ratio in determining Bitcoin’s network value. The Thermo Cap represents the cumulative monetary value of all mined Bitcoins to date and serves as an indicator of the network’s total investment cost. A higher ratio signifies robust network fundamentals. This ratio is calculated by juxtaposing market capitalization with the Thermo Cap, offering insights into whether current Bitcoin prices are justified by network activity.
Global Liquidity Surge and Its Impact on Bitcoin
The United States has experienced a surge in money supply, with global liquidity nearing an astonishing $100 trillion. This increase in liquidity historically correlates with Bitcoin price movements. Currently, Bitcoin is trading at $71,000, bolstered by the inflation in global M2 money supply.
Correlating Bitcoin and M2 Money Supply Levels
According to Philip Swift, founder of LookIntoBitcoin, the global M2 supply approaching $100 trillion plays a pivotal role in Bitcoin’s current price trajectory. The M2 figure, now at $94 trillion, significantly surpasses the peaks observed in late 2021 when Bitcoin reached $69,000. The recent 10% rebound in M2 from the $85 trillion seen during the late 2022 crypto bear market further supports a bullish sentiment towards Bitcoin. These trends align with liquidity-based analyses that predict a promising outlook for Bitcoin.
The Dynamics of Bitcoin and U.S. M1 Money Supply
Another crucial metric is the U.S. M1 money supply, which has recently emerged from a seven-year consolidation—the longest period in Bitcoin’s trading history. This breakout hints at considerable growth potential for Bitcoin, offering investors a compelling reason to remain optimistic about future gains.
Conclusion
In summary, Bitcoin whales are making significant long bets on the cryptocurrency, mirroring past strategies that led to price surges. Coupled with strong network fundamentals, evidenced by the Thermo Cap ratio, and the historical correlation with rising global liquidity, Bitcoin appears poised for another bullish phase. Investors should monitor these developments closely, as they provide valuable insights into potential future market movements.
