Bitcoin has been trading in the $ 30,000 to $ 40,000 range for almost two months now . However, according to a cryptocurrency analyst under the pseudonym Willie Wu, the cryptocurrency may soon give out a bullish breakout of the upper border of the range – at least he came to this conclusion after studying the trends in BTC movement.
We are talking about the active withdrawal of coins from trading floors and reducing the pressure of sellers on the price of a digital asset.
We checked the actual data: today, among other things, Bitcoin managed to show a fall. If yesterday the cryptocurrency was at the level of 35 thousand dollars, then today its local bottom at about noon was the zone of 32231 dollars.
Over the course of the day, the scale of the decline in the BTC rate is equivalent to 6.3 percent, while over the week, the cryptocurrency sank by 7.3 percent.
The largest cryptocurrencies by market cap are showing mixed results. And if the native token of the Binance exchange under the ticker BNB showed 3.5 percent growth in a week, Dogecoin and XRP sank 16 and 11 percent in seven days, respectively.
Traders’ activity is still far from its maximums. This can be understood from the daily trading volume on cryptocurrency exchanges: they have now dropped to levels that have not been observed since the end of January 2021. Accordingly, operations on trading platforms are not very active.
When will Bitcoin start to rise?
The analyst referred to the ratio of bitcoins held in “strong hands” versus “weak hands”. This is usually the name for the experienced owners of the first cryptocurrency and those who contacted it just the day before. This indicator is also known as the BTC supply ratio, that is, the ratio of those who continue to hold their coins after a market correction to those who are strenuously selling an asset amid a collapse.
Here is a quote from an expert in which he shares his attitude to the market situation. The replica is provided by Cointelegraph.
It reminds me of the proposal shock that went unnoticed in Q4 2020. Experts debated whether BTC was a hedge against inflation in the post-COVID-19 world, when all the data indicated that long-term investors were accumulating BTC at a fast pace. Subsequently, the price rose sharply, very quickly detaching itself from the correlation with traditional markets.
Correlation refers to the relationship with traditional asset niches. In late 2020 and early 2021, Bitcoin, along with other cryptocurrencies, really grew sharply, which markedly distinguished them from the background of other industries. In turn, this attracted even more investors to the digital asset niche who started investing in coins, which only reinforced the last stage of growth.
Here, Wu again hints at the possibility of a repeat of the supply shock situation for Bitcoin. At least for now, there are prerequisites for this.
The CryptoQuant platform data will help clarify what Wu said. According to the information published by its employees, the volume of bitcoins withdrawn from the exchanges reached an annual maximum of 60 thousand BTC. At the same time, the volume of coin deposits dropped below 20 thousand BTC .
This means that market players are actively buying bitcoins and withdrawing them to cold wallets for long-term storage. At the same time, the pressure on the price from the sellers is decreasing every day. Well, this traditionally creates conditions for the resumption and continuation of growth.
If the 2020 scenario repeats itself, the price of Bitcoin may well demonstrate rapid growth in the fourth quarter. The likelihood of this is also predicted by the creator of the Avalanche blockchain, Emin Gur Sirer. He believes that the summer and early September will be quite calm for the coin market, and the real revival of the digital assets industry will start from October-November.
We believe that the trend of large investors buying up large volumes of bitcoins, ethers and other cryptocurrencies really hints at a continuation of bull run for the coin niche in the future. However, for now, the market should clearly cool down after a series of relatively recent crashes, and then go through a stage of accumulation – that is, a massive purchase by experienced investors. After this, it will be possible to talk about the niche’s readiness to resume growth.