The countdown to Taproot, the highly anticipated update of Bitcoin, has begun.
This weekend, Bitcoin's highly anticipated Taproot update is expected to take place. The update, which is expected to occur in block 709,632, will allow developers to integrate new features that will increase privacy, scalability and security on the network.
The Taproot update was locked in June after more than 90% of miners supported it. According to Taproot countdown timers, the programmed wait time between locking and activation appears to be less than 27 hours as of broadcast time.
The update, which can be seen as a crucible in which various technical innovations are melted in a single upgrade throughout the history of Bitcoin, will enable new developments and new solutions.
Commentators are divided into two about the effect of the update on the price. While some say that the update has already been priced, others think that it has not been priced yet, based on the fact that the importance of the update is not fully understood. Bitcoin has not yet fully recovered from the wave of sales that came with the bankruptcy rumors of Evergrande, which came out the other day. On the other hand, the SEC rejection of the spot Bitcoin ETF last night also started a new decline in Bitcoin.
Glassnode: Only 13% of Bitcoin Supply Is on Exchanges
According to data from blockchain analytics platform Glassnode, crypto-asset trading platforms only have 12.9% of the circulating supply of Bitcoin.
As the Bitcoin price rises, investors continue to withdraw their Bitcoin balances from crypto-asset platforms. According to recent Glassnode data, 12.9% of Bitcoin's circulating supply is located on crypto-asset trading platforms. This equates to roughly $163 billion. The trend started in August, when Bitcoin started to gain some momentum after the sharp decline.
As is known, the decrease in the amount of Bitcoin held on the platforms is considered a positive indicator. This can be interpreted as investors have high expectations from the asset and do not intend to sell it anytime soon. On the other hand, if investors start to move their assets to the platforms, this is interpreted as they find the price high and are ready to sell. However, it is worth remembering that many factors are effective.
According to data from Glassnode, daily net withdrawals from platforms reached an average of 5,000 BTC. He also noted that despite the price hovering around ATH, on-chain activity remains significantly above bearish levels. In other words, this means that Bitcoin's new record-breaking failed to induce investors to sell. Many investors are content to hold their Bitcoins, which is seen as a signal that the price will continue to rise.
What is the Fear and Greed Index (Crypto Fear and Greed Index)?
Investors who open trades in crypto want to understand the market conditions they are in, just like in other markets. It is extremely important what psychological processes most of the investors go through. Does the investor believe that the bearish movement will start in the market? Or does everyone believe in a great ascension? Foreseeing this is a must for an investor who wants to open a position and close the opened position at the right time.
In some market conditions, the majority of investors believe that an uptrend will occur in the coming period. Therefore, they are eager to buy. During panic sales periods, a rapid decline is seen in the market. So, how can the investor be aware of the psychological state of other investors other than himself? This is where the fear and greed index (crypto fear and greed index) comes into play. First what does index mean? Let's answer the question.
What Does Index Mean?
The index averages different data and reduces them to a single statistical measure. Thus, the data to be seen is simplified. For example, the Dow Jones Industrial Average (DJIA) is one of the indices used for the Stock Exchange. This index shows the average of the 30 largest companies' data across various fields. Thus, investors have an idea about the market conditions.
What is the Fear and Greed Index (Crypto Fear and Greed Index)?
The fear and greed index (crypto fear and greed index) shows the psychological state of investors in crypto. It reveals whether the will to buy or the will to sell is dominant in the market. It is based on the CMNMoney Fear and Greed Index. Examining the movements in the Stock Exchange, CMN Money adapted the chart it produced to the crypto markets.