Did your heart drop yesterday? Did you get excited for dip buying? Welcome to Bitcoin bull markets.
I have been warning of this potential short-term pullback for a couple weeks as Bitcoin price cannot just keep going up forever. There needs to be some relief. It is healthy and good for the long-term potential of this bull run. There is still potential for a further pullback so stay vigilant.
As Ikigai CIO Travis Kling points out, it is important to remember that Bitcoin had 6 major pullbacks in the last bull market of 2017 before having 1000%+ growth.
Over the last year Bitcoin has seen large transactions that equal to $100,000 or more increase substantially. This is a big reason why analysts have claimed that many institutions are beginning to get exposure to Bitcoin. Just to give some perspective, on January 11, 2020, there were just over 13,000 large transactions and on January 11, 2021, there were over 29,000 large transactions.
We can also look at the total transaction volume on these large transactions. As you may have guessed, it has also increased substantially. On January 11, 2020, Bitcoin had $3.61 billion in large transaction volume. On January 11, 2021, Bitcoin had $81.37 billion in large transaction volume.
You can definitely argue that a lot of this rise could be do to the price of Bitcoin rising and therefore transaction sizes naturally getting bigger. However, we do know many institutions have publicly said they’re entering Bitcoin. This extreme rise in large transaction volume clearly shows they are here.
For further clarification, we can also examine the average transaction size over the last year. January 11, 2020 had an average transaction size of $14,312 which was not even 2x the price at the time. January 11, 2021 had an average transaction size of $250,377 which was 7x the price at the time. Clearly, big investors are in the game and they’re transacting more value in Bitcoin terms.
Let’s connect on Twitter. Looking forward to hearing your thoughts and feedback.
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Resources I Use
I use Glassnode for all the metrics I track on the Bitcoin network. Their platform is extremely user friendly and fun to use.
Binance is the main exchange to trade the crypto markets.
Coinsquare offers Bitcoin trading in Canadian dollars and is one of the top exchanges in Canada.
Trading Alpha has built their own indicators that provide buy and sell signals for crypto and equities trading.
I use Tradingview daily to analyze trading charts and find areas of support and resistance.
I learned how to trade through the Bulls on Wall Street program. I’m in this chat everyday giving out my trade ideas.
Nothing in this article is investment advice. I’m not a financial advisor. Do not make investment decisions based on what is in this article or any other article written by BTC News or Blockedia.