Bulls of Bitcoin (BTC) have finally gathered enough strength to push the top-qualified cryptocurrency through the $ 60,000 level, and referring to key benchmarks on the chain, analysts believe the bullrun should be another way to achieve any significant resistance.
Since falling back above $ 50,000 on March 9, every drop in the Bitcoin price has been bought quickly by institutional investors and the BTC balance of whales has continued to grow over the past few months.
What’s next for Bitcoin price?
In a recent report by Ben Lilly, an analyst at Jarvis Labs, analyst Ben Lilly highlighted the “two steps forward, one step back” character of Bitcoin’s price movements over the past week, pointing out that the rise in price accompanied by ‘four disadvantages of 5%’.
According to Lilly, the price action of Bitcoin is a good sign of a healthy profit-taking, as vertical prices are ‘only healthy if they reach all times’, also known as price discovery.
To gain a better understanding of where the price is heading, Lilly noted that wallet sizes with 100 to 1,000 BTC hold about 63,000 more BTC than they did on February 28, suggesting that these whale portfolios have accumulated since the dive in preparation for the price to move higher.
According to Lilly, “this class of wallets were the ones that pulled off the rally in 2017 the best.”
Another bullish indicator highlighted by Lilly is the heavy accumulation that has taken place since the price of the BTC broke $ 20,000, which has not slowed since.
Lilly said:
“The last time we saw an accumulation of such aggression was in August 2017. The peak of the market cycle was not seen for another four months.”
Lilly further explained that while it is almost common for the Bitcoin price to occasionally see downsides after touching a new high of all time, it does little to change the bullish rise.
Lilly said:
“So, to avoid confusion about what we want to say with these cards … Bitcoin has room to walk here. If he decides to rip, it will go.”
Stock market outflow supports the bullish story
In a recent report by Philip Swift, co-founder of Decentrader, Lilly’s bullish sentiment is reflected by pointing to the outflow of Bitcoin over the past few months. As shown in the chart below, Coinbase and Bitstamp have experienced a significant reduction in their exchange rates since mid-December 2020.
The report emphasizes that the reduction in available BTC is “driven by people and institutions taking Bitcoin from the stock market to keep in cold storage.” This in turn reduces the available liquid supply to sell quickly in the market and reduces the changes of a quick sell-out.
Swift noted that a large amount of BTC drawn from the exchanges is wrapped in WBTC and placed in DeFi protocols. This reduces the bullish story somewhat because the tokens are not completely removed from circulation and stored in cold storage, which means that liquidity has not really been reduced.
Another interesting signal discussed by Decentrader is the comparison between Bitcoin held for one to two years compared to those held for three or more years.
In recent weeks, BTC held by investors for less than three years has been sold as holders of ‘shorter-term’ profits. While these levels are falling, Bitcoin investors who have been holding on for more than three years have actually accumulated recently and according to Swift, this indicates that ‘Bitcoin should probably be much more upside down’ in the current bull cycle.
Swift said:
“If we look at the chart, it is possible to see where we are compared to the previous 2017 cycle when these HODL lines behaved in a similar way … in our opinion approaching about half of the cycle. “
For David Lifchitz, Chief Investment Officer of ExoAlpha, the price action for Bitcoin between February 22 and March 11 seems to be the classic shape of cup and handles, which according to technical analysis is a bullish pattern. Lifchitz explained that the price drop experienced on March 11 represents the ‘top of the cup’ by those earning the 10% profit of $ 45,000 to $ 57,000. ‘
According to Lifchitz, a slight setback of no less than the $ 52,000 and a bounce back will form the handle of the cup. The breakthrough above the cup ($ 58,000) would open the door for another build-up of the Bitcoin price.
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