After a Necessary Consolidation Phase, Bitcoin’s Price Is Ready To Soar to $70K
The price of Bitcoin is ready to take off again.
|Sylvain Saurel||Apr 12|
For the first time since the very beginning of March 2021, the price of Bitcoin has once again crossed $61K. Bitcoin has come close to its All-Time High of $61.8K in the last few hours. After a consolidation phase, it seems that Bitcoin is ready to go back into price discovery mode.
Some had doubts that Bitcoin had reached its high for this bullish rally.
Bitcoin is poised to prove them wrong. While the price of Bitcoin is hovering around $60.5K as I write this, Bitcoin's on-chain data suggests that the best is yet to come in the near term.
HODL waves show us that the peak is not yet there
Each sharp increase in the price of Bitcoin usually coincides with the arrival of new people playing the role of short-term speculators. These people hope to make a quick profit with Bitcoin. Meanwhile, long-term speculators begin to add selling pressure in the second half of a market cycle to start making profits.
A good on-chain indicator to watch to determine where we are in such a cycle is called HODL waves:
The length of time each address on the Bitcoin network has held BTC before it is sold on the market is grouped into term groups which are then visualized in different color bands.
On this graph, a person who has been holding Bitcoin for 6 to 12 months will appear in yellow. If that person suddenly decided to sell their BTC, they would appear in the dark red band, the 24-hour band.
Since the beginning of the year, you can see that the trend is indeed towards accumulation. Everyone realizes that Bitcoin still has a lot to offer during this bullish rally.
Bitcoin HODLers continue to hold with conviction
Rafael Schultze-Kraft, Glassnode CTO, also just tweeted a chart called "Coin Days Destroyed" to see the behavior of long-term hodlers. This indicator shows the total number of days destroyed by holders selling their Bitcoin:
Based on the 3-month moving average of this indicator, the destruction has fallen back to a level not seen since the summer of 2019 at a time when the peak of the time had already been reached.
If the price of Bitcoin had reached a top for this bullish rally, this indicator would likely be much higher. Bitcoin HODLers continue to believe that the price of Bitcoin will rise sharply again in the short term.
This is also confirmed by observing the outflows from the major exchange platforms. The levels reached are the highest in the history of Bitcoin. Clearly, BTC has been taken out of the exchanges and kept in cold storage for safekeeping.
This is clearly not the attitude of people wanting to sell their BTC.
$58K must become a major support area
In terms of the price of Bitcoin, the BTC/USDT order book heatmap on Binance shows three major price areas to watch for the next few days: $61,188, $58,387, and $53,000.
As long as the price of Bitcoin remains above $58,387, we could see the price of Bitcoin beat a new All-Time High above $61.8K at any time.
If the Bitcoin price hits a new ATH, it would then be on its way to $70K.
What is important in the short term in this quest for a new ATH is that $58K becomes a strong support region. This is an important level, as it is the peak of BTC's initial rally to $60K in mid-February 2021. From a technical analysis perspective, when an asset stabilizes above a previous price peak, it is usually a very bullish signal.
In addition to this, we can add that Bitcoin just closed the week at an all-time high above $60K.
So everything is in place for Bitcoin to resume a strong uptrend in the coming days and weeks. The $70K mark seems more than ever within reach now. For players in the futures market, this even seems to be a given.
BTC contracts maturing in June 2021 are trading above $65K. We can even see contracts expiring in December 2021 trading around $73.5K. This could well be a strong sign that some investors are very optimistic about the price of Bitcoin through the end of 2021.
While we wait to see what the next few days and weeks hold, if you were still in doubt, you now know that more than ever, you should remain a Bitcoin HODLer. The best is yet to come, even in the short term.
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