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Bitcoin bulls (BTC) have finally gathered enough strength to push the top-ranked cryptocurrency through the $ 60,000 level and citing key on-chain metrics, analysts believe the bull run has a long way to go before it dies. ‘achieve considerable resistance.
Since being pushed above $ 50,000 on March 9, every drop in the price of Bitcoin has been quickly bought up by institutional investors and the BTC balance of whales has also continued to grow in recent months.
What’s next for the Bitcoin price?
A recent report from Ben Lilly, analyst at Jarvis Labs, analyst Ben Lilly pointed out the “two steps forward, one step back” nature of Bitcoin’s price movements over the past week, noting that the rise in prices price was accompanied by “four disadvantages of 5%”.
Bitcoin’s price action, according to Lilly, is a good sign of healthy profit taking, as vertical prices are only “healthy when they reach historic highs,” otherwise known as price discovery.
To better understand where the price could be heading, Lilly noted that wallet sizes containing 100 to 1,000 BTC held around 63,000 BTC more than they did on February 28, indicating that these whale wallets have been piling up since the drop in preparation for the price to go higher.
According to Lilly, “this category of portfolios is the one that timed the rally 2017 the best”.
Another bullish indicator highlighted by Lilly is the strong build-up that has occurred since the price of BTC broke $ 20,000, which has not slowed since.
Lilly said:
“The last time we saw such an aggressive build was in August 2017. The peak of this market cycle hasn’t been seen for four months.”
Lilly further explained that while it’s almost usual for the price of Bitcoin to see occasional drops after hitting a new all-time high, they don’t do much to change the uptrend.
Lilly said:
“So, to avoid confusion over what we’re trying to say with these charts… Bitcoin has room to function here. If it decides to rip it will go.”
Currency exits support bullish discourse
A recent report by Decentrader co-founder Philip Swift echoes Lilly’s bullish sentiment by highlighting Bitcoin’s exchange exits in recent months. As the chart below shows, Coinbase and Bitstamp have seen a significant drop in their currency balances since mid-December in 2020.
The report pointed out that the reduction in available BTC is “due to people and institutions removing Bitcoin from exchanges to keep it in cold stores.” This in turn reduces the supply of liquid available to sell quickly in the market and lessens the changes of a quick sale.
Swift noted that a large amount of BTC withdrawn from exchanges is wrapped in WBTC and placed in DeFi protocols. This cuts down on the bullish talk somewhat as the tokens are not completely taken out of circulation and placed in a cold room, meaning liquidity has not really been reduced.
Another interesting signal discussed by Decentrader is the comparison between Bitcoin held for one to two years and those held for three or more years.
In recent weeks, BTC held by investors for less than three years has started selling as “ short-term ” holders start to take profits. As these levels decline, Bitcoin investors who have been holding for more than three years have in fact accumulated recently and, according to Swift, this indicates that “Bitcoin probably still has a lot more to do” in the current bull cycle.
Swift said:
“Looking at this chart, it’s possible to see where we are compared to the previous 2017 cycle, when these HODL lines behaved the same… approaching roughly half of the cycle in our opinion.
For David Lifchitz, chief investment officer at ExoAlpha, Bitcoin’s price action between February 22 and March 11 appears to form the classic cup and grip formation, which is a bullish pattern according to technical analysis. Lifchitz explained that the March 11 price drop was the “top of the cut” for those who monetized the 10% gain from $ 45,000 to $ 57,000. ”
According to Lifchitz, a slight pullback of not less than $ 52,000 and a rebound would form the handle of the cup. The break above the rim of the cup ($ 58,000) would open the door for another advance over the price of Bitcoin.
The opinions and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move comes with risk, you should do your own research when making a decision.
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