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  • Riot Platforms stock has moved to a bear market: buy the dip?

    Riot Platforms stock has moved to a bear market: buy the dip?

    Riot Platforms (NASDAQ: RIOT) stock price has drifted downwards in the past few days as Bitcoin and other cryptocurrencies retreated. The shares retreated to a low of $11.48 in the pre-market session. This means that the stock has dropped by more than 20% from the year-to-date high, meaning that it has moved to a bear market.

    Is it safe to buy the dip?

    Riot Blockchain is one of the biggest Bitcoin mining companies in the world. It competes with the likes of Argo Blockchain and Marathon Digital among others. Therefore, as in the other mining industry, these companies have a close correlation with the price of the underlying asset.

    This explains why the Riot Platforms stock price has jumped sharply this year. Between the lowest point in 2022 and the year-to-date high, RIOT shares were up by more than 338%, making it one of the best-performing stocks in the market.

    Therefore, to predict whether the Riot Blockchain stock price will bounce back, we need to understand why Bitcoin is falling and whether it will bounce back soon. As I wrote in this article, the main reason for the crash is that bullish liquidations have jumped in the past two days.

    Liquidations happen when brokers and exchanges forcefully close positions of leveraged positions. Therefore, this usually puts prices under pressure.

    Another reason why this happened is that Bitcoin recently rose above the key resistance level at $30,000. Historically, cryptocurrencies tend to be a bit volatile when they move above or below a key support or resistance level. 

    The other reason is that several regional banks, including Western Alliance Bancorp, published strong results. Its inflows rose by more than $3 billion. As such, the risks of a banking crisis seens like they have been minimized. In a note, analysts at Bernstein said:

    “Any potential dislocation, whether on the bank’s credit side, or on the sovereign side …positions bitcoin perfectly as a safe-haven asset alongside gold.”

    Therefore, there is a likelihood that Bitcoin price will bounce back in the coming months as the Fed starts to pivot.

    Riot Platforms stock price forecast

    The daily chart shows that the RIOT share price formed a shooting star pattern on Wednesday. In technical analysis, this pattern is usually a bearish sign. The stock has jumped by more than 25-day and 50-day exponential moving averages. 

    It remains slightly above the key support level at $10.53, the highest level on 11th August. Therefore, I suspect that the shares will drop to the key support at $10.53. The stock will then resume the bullish trend as buyers target the year-to-date high of $14.51.

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  • Over two-thirds of the Bitcoin supply has not moved in a year

    Over two-thirds of the Bitcoin supply has not moved in a year

    Key Takeaways

    • Long-term holders continue to sit on their Bitcoin stashes
    • Two-thirds of the supply has not changed hands in the last year, despite rampant volatility and a collapse of the Bitcoin price
    • Over half the supply has not moved in 2 years or longer

    “Supply squeeze” is a seductive phrase thrown around among Bitcoin enthusiasts. 

    It refers to the predicted propelling upwards of the Bitcoin supply as a result of the supply cap – there will only ever be 21 million bitcoins – and a constant increase in demand. 

    Whether this comes to fruition remains to be seen. But there does appear to be a growing cohort of Bitcoin investors who are holding. In fact, over two-thirds of the entire supply has not moved in over a year, an all-time high. 

    To be precise, 67.9% of the Bitcoin supply has not moved in over a year. That is extremely high, especially when considering the last year have brought its fair share of scandals, including the respective crashes triggered by LUNA, Celsius and FTX. 

    Combining these scandals with the most rapid monetary tightening in the wider economy, which have seen interest rates rise from near-zero to close to 5%, and the crypto market has been pillaged. 

    Looking at the price action over the last 12 months, Bitcoin has fallen from $41,000 to $15,000 and is now trading at $28,000, with more than its fair share of ups and downs in between. And yet, two-thirds of the supply has been stagnant. 

    Branching further out, over half the supply has now not moved in two years, close to 40% hasn’t moved in three years, while 28% has been stationary for 5 years. 

    Of course, lost coins will be included in all these statistics. Bitcoin has been around since 2009, and that means people have died, and with them access to their coins has vanished. 

    There are also simple cases of lost keys, people still roaming the Earth but with no access to their wallets. Let us not forget that Bitcoin was just a niche Internet plaything not so long ago, trading for less than $1 per coin. 

    Not to mention, Satoshi Nakamoto’s mammoth stash of an estimated 1 million coins, or over 5% of the entire supply, remains untouched and included in the above stats. 

    So make of it what you will, but Bitcoin still remains quite an illiquid market and with a dwindling supply, it is easy to see the narrative pushed by enthusiasts that if demand continues to rise, the price will only go upward. 

    Of course, whether that demand will indeed continue to rise is another question entirely, and a much harder one to answer. 

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  • Shiba Inu | Almost 25 Trillion SHIB Tokens Moved In The Past 24 Hours

    Shiba Inu | Almost 25 Trillion SHIB Tokens Moved In The Past 24 Hours

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  • Shiba Inu | Staggering Amount Of SHIB Moved To An Anonymous Address

    Shiba Inu | Staggering Amount Of SHIB Moved To An Anonymous Address

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  • Dogecoin Has Moved Up In Terms Of Crypto Marketcap Ranks

    Dogecoin Has Moved Up In Terms Of Crypto Marketcap Ranks

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  • Large Whales Moved a Huge Amount of Dogecoin to Binance -ME

    Large Whales Moved a Huge Amount of Dogecoin to Binance -ME

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  • Nearly 13 million bitcoins have not moved in over a year, an all-time high

    Nearly 13 million bitcoins have not moved in over a year, an all-time high

    Key Takeaways

    • An all-time high of 12.7 million bitcoins have not moved in over a year
    • That translates to two-thirds of the circulating supply
    • Only 7% of bitcoins have moved in the last month
    • History shows that long-term holders tend to rise as price falls, which may seem counter-intuitive
    • The real story is a little more nuanced, as falling trade volumes in bear markets provide a lurking variable which affects the data

     

    One of the intriguing things about blockchain is the public availability of all sorts of stats about the network.

    A lot is made of the fixed supply cap of Bitcoin, with the final supply of 21 million bitcoins slated to be hit by 2140. Bulls use this as a case in point as to why the asset is programmed to expand in price, as its scarcity will inevitably squeeze the asset upwards.

    By looking on-chain here at https://coinjournal.net/, we noticed a quirk in this data.

    Long-term holders continue to grow

    Despite the bloodbath that was cryptocurrency in the year 2022, long-term holders have continued to accumulate. Out of the 19.27 million bitcoins currently in circulation, 12.77 million bitcoins have not moved in over a year – an all-time high.

    It’s a pretty significant number. In the following chart, I have plotted these bitcoins against two other categories: firstly, bitcoins that have moved in the last month (traders), and secondly, bitcoins that have not moved in over a month but have moved within the last year (medium-term holders).

    Currently, we have 66% of bitcoins unmoved in over a year – again, an all-time high. The previous high was in September 2020 when the mark hit 63%. Prior to that, the previous high was April 2016 at 60%. 

    A further 27% of bitcoins have not moved in the last month, while the remaining 7% can be seen as traded bitcoins, moving around the blockchain in the last month.

    Why are long term holders growing?

    The obvious question is, why? Why are we seeing long-term holders growing so substantially when the market has been getting pummelled?

    Well, I decided to chart the percentage of long term holders against the bitcoin price. And the result is quite interesting – there definitely seems to be at least a moderate inverse relationship between price and long-term holders. That is, when price falls, long-term holders rise. Hmm.

    But in truth, this makes sense. As the price falls, volumes and interest in the market tend to dry up. With that, comes less trading, and by definition less holders under the one-month threshold.

    While the narrative of long-term holders soaking up increasing amounts of the Bitcoin supply is often painted in a bullish light, I’m not sure that tells the whole story when considering this historical pattern.

    Sure, it is a positive thing that the number of bitcoins that have not moved in more than one year are climbing, as it does show that these long-term holders have tended not to capitulate during the drawdowns.

    But a healthy trading market and high liquidity is associated with a bull market, which is part of the reason we are seeing an inverse relationship here. Look no further than trading volume in 2022, which fell 46% on centralised exchanges compared to the previous year – that’s trillions of dollars of activity no longer present.

    “Trading volumes have cratered across the crypto space. This has pulled down activity and it’s not surprising that the portion of bitcoins traded recently is therefore falling. The analysis of long-term holders is a more nuanced issue than the crude assumption that ‘more bitcoins in long-term wallets is bullish and therefore price will go up’. That is simply not what we have seen historically” said Max Coupland, Director of CoinJournal.

    I’ll continue to monitor all on-chain activity, as the market is certainly showing more life in these early stages of 2023, with softer inflation data giving impetus to the market that we may pivot off high interest rates sooner than previously expected. It will be interesting to keep tabs on the dynamics on-chain, therefore.

    But next time somebody declares it obviously bullish that there are less bitcoins being flung around the markets, perhaps remember that the situation is a little more complex than that.

    If you use our data, then we would appreciate a link back to https://coinjournal.net. Crediting our work with a link helps us to keep providing you with data analysis research.

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