Bitcoin price rally is still in early stages, according to this on-chain indicator
The Bitcoin price is still in the early stages of its bull run, despite recent setbacks. At least if this key BTC metric is to be believed.
The price of Bitcoin (BTC) saw a small correction yesterday as the global stock market also struggled with a decline. The top cryptocurrency fell another 4% in the last 24 hours, erasing most of the gains it Immediate Bitcoin posted during yesterday’s rally. But apparently this is no cause for concern.
Bitcoin price is still in early to mid-stage of its bull run
According to William Clemente, a crypto analyst, Glassnode’s Reserve Risk Indicator shows that the Bitcoin price rally is still in the early to mid stages.
As Clemente explains, reserve risk is defined as price/HODL bank. The indicator is „used to assess the confidence of long-term holders relative to the price of the native coin at a given point in time.“
So if Reserve Risk is still relatively low compared to previous highs, this shows that the Bitcoin price is not yet in danger of approaching a macro top. Currently, BTC’s Reserve Risk is at half the level seen in 2013, 2014 and 2017, before the Bitcoin price crashed by well over 50% and entered a bear market.
Kyle Davies, the co-founder of Three Arrows Capital, noted that the global macro market has sold off, but Bitcoin has not seen a massive correction as a result. As a result, BTC has held up much better against many stocks. He said:
You should look for relative strength when others are weak.
For example, big tech stocks and retail-favoured stocks like Tesla saw a big sell-off on 3 March. As a result, most risky assets fell, showing the overall weakness in the global macro market.
Lex Moskovski, CEO of Moskovski Capital, also noted that strong holders continue to add to their bitcoin positions. As long as such wealthy investors continue to accumulate Bitcoin, he thinks the bull trend will likely remain intact.
Another day, another large increase in #Bitcoin illiquid supply.
Strong holders are ramping up their positions despite the sell-off.
Bitcoin is holding up against the macro spectacularly well. pic.twitter.com/DcEAbXdIB9
– Lex Moskovski (@mskvsk) March 4, 2021
This shows that there are indeed still some arguments that, regardless of the current correction in the Bitcoin price, there is theoretically still immense upside potential. In any case, the market is undeterredly bullish and expects the price rally to continue soon.