This unique factor is contributing to a Bitcoin rally – and it hasn’t diminished, according to Crypto Exchange Kraken

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The Kraken cryptocurrency exchange reveals a factor that could be responsible for the rally in Bitcoin (BTC) during the month of October.

In a new report, Kraken says that a supply shock trend, which shows no signs of abating, could be one of the driving forces behind Bitcoin’s rally this month.

“BTC braced for a supply shock thanks to further accumulation by long-term holders. This build-up may be a driver of BTC’s recent move beyond $ 60,000. The latest data on the chain indicate that this tendency towards supply shock is increasing. “

Kraken says he’s keeping an eye on the HODL wave metric, which shows the percentage of the BTC supply that has been dormant over a specific time period. According to the report, long-term holders continue to accumulate Bitcoin despite its strength this month.

“As of May 24, young coins are maturing at a rapid pace in the long-term holdings category. Over the nearly five-month period, old coins rose 10.9 percentage points to 51.6%, while young coins fell -11.8 percentage points to 25.49%, the lowest figure since November 2018, when BTC was worth around $ 5,700. Over the past month, young coins lost a further -1.57 percentage point, while older coins increased by +1.48 percentage point. This tells us that long-term holders, who own most of the coins, continue to accumulate supply.

Because of this, the immediately marketable supply continues to shrink – hence our observation that BTC could experience a supply shock. “

Bitcoin miners are also partly responsible for the supply shock, according to Kraken.

“The largest state-owned BTC mining companies in North America, including Riot, Marathon, Bitfarms, Hut8, Greenidge, Argo and HIVE, have publicly stated that they hold 20,459 [BTC} (~$1.25B), including 4,812 [BTC] (~ $ 293 million) of Marathon that he bought on the aftermarket earlier this year …

Needless to say, mining pools are aligned with long-term holders in their bullish sentiment and represent an additional contribution to the latest BTC supply shock.

The cryptocurrency exchange also indicates that a consensus is developing among market watchers that long-term Bitcoin holders expect the flagship crypto asset to rise as 2022 approaches.

“Despite BTC falling more than -15% in September and rising through October, long-term holders continued to accumulate. This suggests to market watchers that long-term holders see a further rise as a new year approaches. “

You can read the full report here.

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