Cryptoquant’s Head of Research observed a rise in demand for BTC among Bitcoin holders. There’s a record-breaking inflow of Bitcoins into addresses that only receive but never spend them.
Julio Moreno pointed out that some indicators suggest a potential overheating phase after Bitcoin’s recent surge.
Bitcoin Accumulation Surges Despite Overheating Signals
Julio Moreno, Head of Research at Cryptoquant, has observed a surge in demand among Bitcoin holders. Data from Cryptoquant reveals a record-breaking inflow of Bitcoins into addresses that only receive but never spend, known as accumulation addresses.
Latest on #Bitcoin 🧵:
There's record high demand as seen in record-high inflows into accumulation addresses (addresses that only receive Bitcoin and never spend). pic.twitter.com/JsFCQJYbhp— Julio Moreno (@jjcmoreno) March 2, 2024
In a recent post on X, Moreno shared insights into how Bitcoin inflows into accumulation addresses rose significantly during the recent Bitcoin rally. However, he also noted that BTC’s rapid rise triggered some indicators signaling an overheating phase. One such indicator is the Bitcoin bull-bear market cycle indicator, which indicated overheating when BTC hit $60,000.
Moreno’s post further elaborated that the last time the Bitcoin bull-bear market indicator signaled an overheating phase was in December of the previous year. This signal followed an 83% rally by Bitcoin, after which it entered into a consolidation phase.
Bitcoin Overheating Signals: Insights from Moreno
Moreover, Moreno considered the situation of Bitcoin miners’ rewards. He suggested that given the current market conditions, Bitcoin miners are being overpaid, indicating that Bitcoin has entered an overheating phase. Similarly, miners’ rewards spiked in December 2023 during a significant BTC rally.
In addition to the signals from the previous three indicators identified by Moreno, the Head of Research at Cryptoquant also noted extremely high levels of traders’ unrealized profits. At 45%, Moreno believes this indicates that BTC traders may initiate profit-taking by selling their Bitcoins.
At the time of writing, Bitcoin was trading at $61,942, marking the fourth consecutive day of sideways movement after reaching a seasonal high of $64,000, according to TradingView data. This sideways movement suggests price consolidation, supporting Moreno’s observations. Nonetheless, the upward momentum of the leading cryptocurrency remains strong, and users anticipate higher levels as the current bull cycle progresses.
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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