Three Reasons Bitcoin’s Price Will Only Go Higher
As a second week of high volatility for the granddaddy of digital currencies draws to a close, many people are asking what is next for Bitcoin?
Having crashed from a $65k all-time-high earlier in April, Bitcoin has stabilized sufficiently around the $40k. However, there are signs that the bear run on Bitcoin is over and that Bitcoin’s price will only go higher. Here are three reasons why:
People are Hodl-ing Bitcoin
Despite some big whale movements and a bout of profit taking, people in general are not selling their Bitcoin and more people are buying. The "Number of Accumulation Addresses" hit a record high of nearly 550,000 just as the BTC/USD exchange rate hit $30,000 on May 19th.
Bitcoin is still very much viewed as a long term investment. The surge in accumulation addresses during the recent Bitcoin price correction shows that bulls with long-term setup absorbed the selling pressure.
People are not depositing Bitcoin
Glassnode, the on-chain analytics platform revealed that the total number of crypto addresses sending Bitcoin to cryptocurrency exchanges has been noticeably declining of late.
There has been a definite decline in the number of new Bitcoin traders who might want to transfer BTC to exchanges to sell it or trade it for other assets. This indicates a downtrend in potential selling pressure as newer traders tend to react more emotionally to Bitcoin’s volatility.
The Charts Don’t Lie
When looking for future price movements, it is important to consult the charts and do some technical analysis. Even with the big decline, Bitcoin’s 31.1% intraday decline was the fourth-largest fall on record for the digital currency, the charts look good for Bitcoin. In fact, the last time Bitcoin saw such volatility in January 2021, the cryptocurrency then went on a record bull run culminating in an all-time-high price.
The Moving average convergence divergence (MACD) indicator for Bitcoin shows a period of gains ahead after this recent market correction.
Knowing when a dip has bottomed out is never an easy task. The wild volatility isn’t always for the faint hearted. However, when looking at the stats listed above, and the recent rally, there is plenty of good cause to see gains ahead for Bitcoin. What better time to start trading Bitcoin today at Cointandem