Crypto Analyst Predicts Much Higher Bitcoin Prices Based on 'Very Bullish' On-Chain Metric
A popular crypto analyst thinks one particular on-chain metric bodes well for Bitcoin’s (BTC) future price action.
Analyzing Bitcoin's Annual Absorption Rate on Exchanges: InvestAnswers Reveals Promising Outlook for BTC
In a recent YouTube video, the anonymous host of InvestAnswers delves into Bitcoin's annual absorption rate on exchanges. The host examines an absorption chart provided by crypto analytics firm Glassnode, which defines the metric as a comparison between the rate of balance change on exchanges over a year and the volume of BTC mined during the same period.
According to Glassnode, the absorption rate serves as a relative measure of the new supply absorbed by this particular cohort, allowing for values exceeding 100% as coins can be transferred from other investor groups.
Addressing his substantial YouTube following of 446,000 subscribers, the InvestAnswers host highlights the current absorption pattern, indicating the potential for "much higher prices in the future" for BTC.
The host explains that a negative absorption rate, as seen on the right side of the chart, signifies the withdrawal of Bitcoin from exchanges, implying a net drainage effect. This negative absorption rate is generally considered a bullish indicator as it suggests reduced selling pressure, indicating that investors are more inclined to hold onto their Bitcoin rather than sell it on exchanges.
Crucially, the current yearly absorption rate for Bitcoin on exchanges stands at a significant minus 100%, making it an essential factor to consider.
Bitcoin is trading at $30,040 at time of writing. The top-ranked crypto asset by market cap is up 0.86% in the past 24 hours.
I
Jul 20, 2023
