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HomeFinance NewsBitcoin's 2021 highs revisited with the help of 'new money' influx.

Bitcoin’s 2021 highs revisited with the help of ‘new money’ influx.

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Bitcoin has experienced a significant surge in price in 2023, leading to spot trading volume reaching multi-year highs comparable to the 2020-2021 bull market, according to a report by Glassnode. Despite some recent challenges, Bitcoin’s daily spot trade volume is currently around $7 billion. The comparison between the 180-day moving average and the 30-day moving average indicates strong demand in spot markets since the market rally began in October 2023.

In addition to the increase in spot trade volume, there has been a rise in the flow of coins in and out of cryptocurrency exchanges due to Bitcoin’s price rally. This surge in demand has attracted a new wave of investors looking to capitalize on the market rally, with an increase in the share of wealth held by coins younger than six months. Glassnode’s data also suggests that it is important to monitor the behavior of these new investors given their price sensitivity and readiness to sell if Bitcoin’s price drops below their cost basis.

As Bitcoin continues to see growth in trading volume and new investor interest, it is evident that the cryptocurrency market is evolving dynamically. The balance between long-term holders and new demand will be a key factor to watch as Bitcoin’s price rally unfolds, with the potential for new investors to impact market dynamics in the future. Glassnode’s insights highlight the importance of tracking these trends to better understand the evolving landscape of cryptocurrency trading.

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