Kraken Report: SHOKTOBER and On-chain Anaylsis

Kraken Blog | Oct 28, 2021

After a predictably underwhelming September in the crypto markets, history was made in October as BTC hit new all-time highs.

As foreshadowed in last month’s Crypto On-Chain Digest, End of Summer Sale, data indicates that a supply shock (driven by long-term holders) contributed to BTC’s rise to record levels.

See: 

U.S. Justice Department Sets Up National Cryptocurrency Enforcement Team

SEC Chair Gary Gensler speaks to Yahoo Finance on Stablecoins, ETF rollout, DeFi lending and more

In Kraken Intelligence’s latest Crypto On-Chain Digest, S H O C K T O B E R, the team further analyzes the impact of BTC’s supply shock, how whales and long-term holders are leading the charge and why on-chain metrics suggest that the bull run still has significant upside.

October 2021 Takeaways

• As foreshadowed in our September On-Chain Digest: End of Summer Sale, data suggests a supply shock  appears to have contributed to BTC gaining  more than  +50%  month-to-date. Despite the latest  rally, our findings indicate there  has been  little profit-taking from long-term holders.
• 1-year revived supply, which reflects long-term holder activity, supports the observation that holders are contributing to BTC’s supply shock; on October 18th, BTC’s 1-year revived supply fell to ₿2,293.5, the lowest  level since August when BTC was trading at about  $48,000.
• BTC’s HODL Waves shows that the number of coins that haven’t moved in the past 6 months (young coins) recently  hit a 3-year low of 25.49%, which suggests that long-term holders held through September softness and October ’s strength.
• Miner supply points to further holding amongst mining pools, while individual miners  realized a relatively modest amount of profit.
• Validating the uptrend and highlighting strong demand for BTC, the excitement in the market is evident across several  metrics and indicators. Renewed demand for BTC is increasingly clear when looking at active addresses, new addresses, transaction count, velocity, and other metrics;  since September, active addresses, new addresses, transaction count, and 1-year active supply velocity have risen +10.3%, +4.7%, +10.5%, and +4.9%, respectively. Data indicates that much of this jump in network  activity is attributable to BTC “whales.”
• BTC’s Spent Output  Profit Ratio (SOPR), MVRV Z-Score, and exchange net position  suggest that the bull market  cycle may have further room to run despite BTC reaching new all-time highs.

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