Why hasn’t Bitcoin finished its rally despite the current price drop?

The Bitcoin correction, which began this spring, is unlikely to continue in the near future. Experts of the analytical platform Glassnode note that the crypto market has not yet switched to a bearish trend – that is, to a stage of decline, which means that in the long term, the price of BTC will continue to grow.

They support their theory with evidence that investors who have owned a crypto for a relatively long time do not want to part with their investments yet. Accordingly, there are relatively few reasons for massive sales and a collapse of the exchange rate.

We checked the actual data: today, Bitcoin is trading at $ 45,539, which is ahead of the previous day by 4.5 percent.

Over the past weeks, the cryptocurrency has shown almost continuous growth on a daily basis, which indicates the asset’s readiness to move to the active bull run phase.

bitcoin chart rate

Daily chart of the bitcoin rate

Despite this, Bitcoin still lags behind its all-time high of $ 64,804, recorded on April 14, 2021, by almost 30 percent. In this regard, the most cautious traders assume that the market has already peaked, and then a protracted collapse of the niche is supposedly waiting for us. However, analysts disagree with this opinion.

What will happen to the Bitcoin exchange rate?

Investors who bought BTC at least a year ago are not looking to sell the market short. But «newbies» – that is, those who own a coin for no more than six months, are very active in making transactions for the sale of bitcoins. This trend and comparison with the previous bearish cycle of the crypto market are clearly visible in the screenshot below. Notice how the chart under the BTC price chart rises sharply during the 2018 bearish cycle. This is a sign of large sales of bitcoins across the market.

Bitcoin chart trading

Columns on the chart below the chart by color represent long-term and short-term coin holders.

Accordingly, experienced players do not want to part with this type of digital asset. This means that they see great potential in it, which is likely to be realized in the future.

A new trend in trading in the main cryptocurrency is massive hodl, that is, long-term investments even on the part of relatively old market players, whose unrealized profit on investments in BTC is measured in hundreds of percent.

Here is a quote from the analysts’ report on this subject, in which they share their vision of the situation. The cue is from Decrypt.

Despite a strong rally up to 45 thousand dollars, there are still no large sales of «old» coins in the crypto market – investments for more than a year. This is all very different from the 2018 bear market, when investors took profits on any more or less noticeable pullback in the price of Bitcoin.

As a result, the conclusion of analysts is unambiguous: the collapse of the Bitcoin exchange rate from a record 64 thousand dollars to a local bottom at the level of 28.8 thousand dollars on June 22, 2021 does not mean the beginning of a new downtrend. First, after that, BTC was able to properly grow and pull the rest of the market with it. Secondly, investors are not going to get rid of their positions, which traditionally contributes to the development of the market over the next few months.

Bitcoin chart trading

The rise and fall of BTC during the previous market cycle

Today BTC is trading above the $ 45k line . The cryptocurrency was also able to break above the important 200-day moving average on a 1-day chart scale. Usually, such a factor is considered by many traders to be a trigger to open long positions, that is, there are a lot of prerequisites for further asset growth now.

Bitcoin chart trading

The moment of crossing the moving average on the 1-day Bitcoin chart

We believe that the point of view of Glassnode analysts is true. First of all, it is backed up by data that speaks in favor of the market’s willingness to continue its growth. However, more importantly, the niche participants themselves are gradually getting rid of fear after the crash and realize that the industry has retained its potential for development. This means that soon the leaps of BTC and other cryptocurrencies against the background of mass euphoria will become even more noticeable.

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