Recently Bitcoin (BTC) has been moving in an intermediate price range that is between the top at $64,000 and the low around $30,000. We have been in this interval for several months now and we are waiting for a signal that will make us understand what the next movement will be. Many are wondering if this is the right time to invest or if it is too late. In this post we will NOT answer this question. Bitcoin is a revolutionary technology, those who decide to invest must first know it and here we will make an analysis of some factors that characterize its price.
In recent weeks it seemed that BTC wanted to start up again, reaching the $52,000 threshold, but it all turned out to be a false break-out and today the price is still leaning on the support of $45-46,000. However, the latest bullish move brought the 50-day moving average (MA50) very close to the 200-day moving average. Let's try to do a study of all the various factors that can give an idea of ??what will happen to Bitcoin in the near future, seeing if these are Bullish or Bearish.
Golden Cross
The cross between the two moving averages, where the MA50 crosses the MA200 upwards, is called the Golden Cross. In technical analysis, the Golden Cross is a very strong bullish signal and, as far as Bitcoin is concerned, it has always led to significant increases in the price. It must be said that for the Exponential Moving Averages (EMAs) the Golden Cross has already occurred a month ago, but these are much faster indicators than the MAs and react to price changes more quickly. Despite this, a Golden Cross brings euphoria and greed to the markets as investors expect the price to rise and are inclined to buy rather than sell. Bitcoin scored a Golden Cross between September 14-15th, 2021 and from now on the MA50 stands above the MA200, just like when the last bull-run started which took the price from $10,000 to $60,000.
Marketcap
Total Marketcap just marked an Equal-High from the previous move. It is a graphic structure that provides two maximum areas at the same level. Even if its value has dropped slightly for a few days, it still remains above 2 trillion dollars. This value is very high compared to a year ago and the graph is constantly growing. The uptrend is very strong and the push behind it portends new highs that would lead BTC to a new bullish cycle. Incidentally, as in the previous upside, the chart appears to be resting perfectly on an oblique support and the next move could lead to a significant upside.
Dominance
The Dominance of Bitcoin expresses the percentage of capital on BTC compared to the total Marketcap and alt-coins. We are currently at around 40%, a level that coincides with the average values ??measured during the end of 2017 and the beginning of 2018. During 2020 and the first part of 2021 it has risen to over 60%, probably due to FOMO created by halving. Many people believe that when Dominance drops to 30 to 40%, the alt-season begins. This has a rationale as capital moves from BTC to alts. Now there are two equally probable scenarios: either the Dominance bounces and rises, starting a new bullish impulse for Bitcoin, or it falls below the support where it is and an alt-season starts with the explosion of many alternative currencies.
Hodl waves
From Glassnode we can see this very interesting graph that highlights how the addresses that have been holding BTC for very long periods of time are increasing. In particular, the band that has held this asset for more than 10 years has been in a growing trend for three years and this suggests that there are many more Hodlers than traders. It should be considered that if BTC is held in wallets and not on exchanges, the purpose is certainly not to sell it. For this reason, there are fewer BTCs in circulation and those who want to buy it are obliged to do so at ever higher prices. This can also be seen from the fact that the exchanges' BTC reserves are at historic lows.
Stock to Flow
The Stock to Flow (S2F) model is a system for predicting the price of an asset that has scarcity as its characteristic. This model predicts a $100,000 price tag for BTC by 2021. PlanB, the creator of the S2F model, recently tweeted that he thinks we could see BTC hit $288,000 within a few months. This would be due to a phenomenon called Supply Squeeze, which would predict a very rapid rise and fall in the price due to a shortage of BTC supply.
Hodl & Earn
In the end, however, those who invest in Bitcoin because they believe in technology and the ideal it brings are not interested in short-term movements. It certainly would be nice if the price went up because it would indicate that the technology has been adopted by the masses and works. Personally, I believe that those who hold an asset because they believe in its fundamentals have an advantage in making it an income. Currently, one of the best returns on Bitcoin is offered by Celsius Network, which gives an APY of 6.20% and offers a welcome bonus of $50 in BTC. I have described all of this in my article: My CeFi experience #2: Celsius Network
To conclude..
Nobody knows how Bitcoin will behave in the future and I urge everyone to be wary of those who try. As we have seen from the various analyzes, many factors are bullish regarding the price trend. This gives hope for an impending rally and brings confidence to the markets. Also seeing how BTC cycles have been in the past, my sentiment is certainly bullish. However, if you are wrong, there will be an opportunity to accumulate even more BTC. In any case, after reading this DYOR (Do Your Own Researches) article before investing.
(Not a financial advice.)
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