While the number of BTC addresses holding modest amounts of the cryptocurrency continues to rise.
As the price of Bitcoin (BTC) rose to nearly $40,000 on Feb. 25, increasing 16 percent in less than 24 hours, buyers returned to the market, looking for additional upside chances.
Investors are increasing their Bitcoin holdings
According to the most recent data from CoinMetrics, the number of Bitcoin addresses with a balance larger than 0.01 BTC ($400) reached a new high of 9.51 million.
Meanwhile, for the first time in history, the number of addresses holding at least 0.1 BTC ($3,850) surpassed 3.34 million.
On Thursday, the Bitcoin network added a little more than 24,500 non-zero balance addresses, coinciding with BTC’s bumpy price changes — from roughly $37,200 to around $34,500, then a comeback toward $40,000.
Ecoinometrics, a data resource, separated the addresses into two categories: one with less than 1 bitcoin and the other with 1,000 to 10,000 bitcoins, adding that both groups have been “buying the Bitcoin dip.”
As the Ukraine conflict worsens…
Despite the US Federal Reserve’s plans to tighten policy next month, the Ukraine-Russia conflict may be leading to higher commodity prices globally, raising the likelihood of increased inflation.
However, Mohamed El-Erian, Allianz’s top economic counselor, indicated that the central bank’s aggressive rate-hiking plans will not be pursued due to the worsening geopolitical environment.
“This effectively eliminates the possibility of a 50 basis point [rate hike],” he told CNBC.
“It takes the eight, nine hikes people were talking about for this year off the table. I don’t think the U.S. economy could accommodate such slamming of the brakes of monetary policy. It means the Fed is going to have to be even more careful and tolerate inflation.”
El-Fed Erian’s prognosis was discussed by Michael Saylor, CEO of MicroStrategy, who added that the ongoing Ukraine-Russia war might cause inflation and “make Bitcoin interesting.”
According to Bitcoin Treasuries, Saylor’s company has approximately 125,000 BTC in its treasury, worth around $4.84 billion.
Is it possible that Bitcoin may fall below $30K in the near future?
Despite Saylor’s bullish view, which came after Bitcoin’s intraday rally to $40,000, the market’s Fear and Greed Index score was 27, indicating investor/trader jitters in the short term.
Despite having a high long-term upside view, Nick, an analyst at Ecoinometrics, believes that Bitcoin’s price may experience a price correction below $30,000.
The mismatch between bearish and optimistic holdings on the Chicago Mercantile Exchange’s (CME) Bitcoin options market, which favors the former, is mentioned as the explanation.
He said in a report dated Feb. 23 that “the puts to calls ratio on the CME Bitcoin options market remains at three puts for every call,” adding that “50 percent of the puts are on strikes” that are currently below $30,000.
“So that gives you an idea on what the market expects in the short term.”