The Bitcoin SoV thesis is gaining traction, with indicators showing that $1.03 trillion is currently on the network

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Bitcoin continues to show resilience, holding above key demand levels after recently falling from all-time highs. While the market grapples with negative sentiment and a wave of bearish forecasts, BTC’s price action remains stable, providing hope for investors awaiting a potential recovery.

Increasing Bitcoin’s importance, CryptoQuant’s CEO recently shared compelling data that connects off-chain and on-chain metrics. The analysis shows that the estimated capital held on the Bitcoin network has increased to $1.03 trillion. This significant growth underscores the narrative of BTC as a solid store of value, which is consistent with the thesis that many analysts are making in favor of the leading cryptocurrency.

As macroeconomic uncertainty emerges, Bitcoin’s ability to maintain its position above critical levels provides a sense of stability to an otherwise volatile market. Investors and traders are closely monitoring whether this newfound support translates into growth or whether broader market forces will further weigh down BTC. For now, the data suggests that BTC’s fundamentals remain sturdy, fueling confidence in its long-term potential as a digital store of value.

The capital accumulated in the Bitcoin network is growing

Bitcoin had an incredible 2024, with its performance reflected not only in price growth, but also in key metrics showing the growing strength of the network. As the year comes to a close, data suggests that Bitcoin’s role as a store of value (SoV) is more prominent than ever.

CryptoQuant CEO Ki Youthful Ju recently shared valuable insights about Xrevealing that by combining off-chain and on-chain data, the estimated capital held on the Bitcoin network reached $1.03 trillion, an boost of 85% compared to the previous year.

Bitcoin Stock Value Index | Source: Ki Youthful Ju on X

This growth supports the view that BTC is increasingly viewed as a long-term store of wealth, beyond mere speculation. Ju explains that it’s not just about the market capitalization, which currently stands at $2 trillion. Adding $1 to BTC does not directly translate into an boost in its market capitalization by $1. Instead, we can estimate capital inflows based on a combination of off-chain and on-chain data.

First, off-chain exchanges are considered, where foreign exchange reserves are multiplied by the volume-weighted average price (VWAP) to estimate the capital brought to market through exchanges. Secondly, transaction chain data is used, in particular on exchange and over-the-counter deposits/withdrawals. Bitcoin execution and settlement occur simultaneously, and capital inflows can be tracked via the realized cap, which monitors the cost basis of BTC movements on the blockchain.

Combining these indicators, we get the SoV Index, a tool that records the real capital flowing into the Bitcoin network. This provides a clearer picture of BTC’s value and its growing status as a global store of value, with data confirming its fundamental strength heading into 2025.

BTC is fluctuating between key levels

Bitcoin is currently trading at $93,600 after several days of selling pressure and fear in the market. The price peaked at $99,880 last Thursday, but has since fallen more than 6%. This recent decline has raised concerns about Bitcoin’s immediate price action, but the key levels to watch are clear.

BTC tests key demand above 92k dollars
BTC tests key demand above 92k dollars | Source: BTCUSDT chart on TradingView

If BTC manages to break above the $100,000 level and hold it as support, it would signal a bullish confirmation, potentially paving the way for a up-to-date price rally. This level has psychological significance and if it persists, it will strengthen the upward trend.

On the other hand, if the bulls lose the critical support range around 92,000. dollars up to 90 thousand dollars, a deeper correction may occur on the market. A break below this support would likely trigger further selling, potentially testing lower levels in the near future.

These levels will likely determine Bitcoin’s short-term direction. As the market continues to react to external factors, keeping an eye on these key zones will be vital to understanding the direction of Bitcoin’s future development.

Featured image from Dall-E, chart from TradingView

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