After a bad start to 2022, the world’s largest cryptocurrency Bitcoin is finally showing some green shoots in the past two days. Well, thanks to the heavy accumulation of miners that has taken place over the past few days.
Demonstrating complete confidence in Bitcoin at $40K, miners have been making aggressive Bitcoin purchases according to the chart on Glassnode. According to recent data, miners have been accumulating at the fastest rate since the market correction in May 2021.
Miners are accumulating #Bitcoin at the fastest rate since May 2021! 💥🚀 pic.twitter.com/5n9RRty0Qi
– Bitcoin Archive (@BTC_Archive) January 11, 2022
It’s been five consecutive days of accumulation with Bitcoin miners adding over 6,100 BTC to their cat. Furthermore, as we all know, the mining giant Bitfarms added a staggering 1000 Bitcoins during the recent price correction, bringing the total holdings to 4,300 levels.
Is $40,000 a New Bottom for Bitcoin?
Jurrien Timmer, director of Global Macro at Fidelity presents an interesting analysis. Timmer writes that amid a hawkish Fed, the crypto market has brought the stock market under downward pressure.
But he added that Bitcoin has now found a key support area at $40,000. Timmer analyzes this on the basis of the S-curve model. He wrote:
The $30k level in 2021 provides support based on my demand model (S-curve model). That same level appears to have risen to $40k, once again providing fundamental support. It is a moving target that often provides a basic anchor for the price.
Besides that, the Fidelity executive also compared Bitcoin to another traditional store of value known as the yellow metal, Gold. He noted that the Bitcoin/gold ratio has dropped to a breakout zone compared to last year. This suggests that Bitcoin is moderately oversold at $40,000.
Therefore, director Fidelity add that Bitcoin has both – technical and fundamental – support at $40K. Even if Bitcoin drops to this level, it could be a quicker recovery. Fed CPI inflation data and the end of this week will be crucial in determining where we are headed!