With Bitcoin Up 37% since October 1, 2021, BTC’s development looked rather promising in the fourth quarter. For over 10 days, BTC’s candles closed green on the daily chart. With the asset trading at $ 56.5,000, market expectations for the coin also rose.

However, with the top coin seeing such price growth, not only did the price anticipation change, but the way BTC’s status was viewed as an asset seemed to be repositioning itself.

Supply shock narratives

A noticeable trend in this cycle was that the aggregate Bitcoin balances on the exchanges had been in a downward trend since the end of July. In the past, the BTC exchange reserves hit new lows alongside the coin’s ATH prices.

Source: CryptoQuant

Indeed, the market has been inundated by a positive supply shock with rising new addresses, peaking outflows, and rising prices Stories. While the possibility of a supply bottleneck on the exchanges cannot be ruled out, it was a very positive development that BTC left the exchanges and hopefully ended up in its own custody.

Holder HODLing the wave

When Bitcoin ended the weekend above 56.3K, data analytics site Santiment iterated how the market continues to be a whale market. In particular, addresses with 100-1,000 BTC accumulated 85.7K BTC towards the end of September 2021.

These whales now held 21.3% of the supply, which is the greatest ever. This group of investors finally got rid of the entire slump and broke out after a five-month consolidation.

Source: Sanbase

In addition, the percentage of coins that were last active in the past three months was at an all-time low never seen before. This behavior was an indication of the shift in the macroeconomic environment and at the same time showed a high HODLing behavior.

This, coupled with the incoming institutional money, appeared to be establishing itself as a potential safe haven. In fact, BTC’s Sortino Ratio, which can be interpreted as the actual return above investors’ target return per unit of downside risk, was arguably close to Apple’s. Notably, BTC’s Sortino Ratio at the time of writing was 0.021113 while Apple’s was 0.0709.

Paradigm shift

If you look at the supply-demand dynamics of BTC with decreasing supply in the exchanges, people will wake up to the idea that Bitcoin is not just a speculative asset that can be turned over in the short term, but something to hold for the long term can?

There have been monumental changes in BTC’s macro environment as institutional money came in and plans for a BTC ETF looked solid.

All of these factors, coupled with reduced supply and potentially increasing demand, make the paradigm shift look monumental and it is possible that Bitcoin will have some exciting moves ahead of it in the months ahead. But as unpredictable and sensitive to external news as BTC is, one thing was certain – Q4 could make or break the top coin ‘s fall in macro terms. Either way, it’s going to be a pretty interesting time to watch him move.

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