After a divergence of $ 15,960 on Nov.6, Bitcoin (BTC) price defended strongly from the $ 15,000 support level. Based on four internet data points, analysts believe the rally could continue at over $ 16,000.
Analysts identified low bitcoin foreign exchange reserves, steady supply, growing strong hands and unrealized profits as factors for the continued rally.
The number of BTCs on the exchanges is declining
Delphi Digital, an independent cryptocurrency research and advisory firm, recently released a report on the Bitcoin market outlook.
Delphi analyst Paul Berlage said that online computing usually reflects a strong momentum for Bitcoin.
Since February 11th, Bitcoin’s foreign exchange reserves have decreased from 2.96 million to 2.41 million. In dollar terms, a drop of 550,000 BTC equals $ 6.36 billion.
The decline in bitcoin foreign currency reserves is optimistic because it means that fewer sellers are placing bitcoins on exchanges. Berlage sa:
11. February 2020 reached a record high for BTC of $ 2.96 million on exchanges. At the time of writing, the price of BTC on exchanges is $ 2.41 million. This current trend shows a divergence between BTC stock and price, indicating a further upward movement Sustainability of BTC Dollars. ”
Bitcoin foreign exchange reserves. Source: Delphi Digital
Bitcoin supply increased unchanged
While fewer sellers transfer their money to exchanges, steady bitcoin supply remains high.
On September 9, Berlage explained that the percentage of unchanged Bitcoin supply to a full-time job was 63.5%. Since then, it has decreased slightly to 62%, but given that the price has increased significantly this is a positive sign. It is to explain:
Over the past week, we have seen a slight drop in the percentage of unchanged offers in the last year. After reaching a full-time high of about 63.5% of unchanged supply on September 9, we are now at 62.0%. ”
This indicates that investors are increasing BTC “HODLing” despite the recent rally, so far not making much profit.
There are no visible signs of climax yet
The number of “weak” or speculative buyers has decreased significantly in recent weeks, while strong hands have strengthened.
The departure of short-term buyers and the arrival of long-term contract holders indicates that Bitcoin may survive a long rally.
This trend coincides with Bitcoin’s resilience above $ 15,000 and shows that the heavy resistance level one day is close to becoming a support zone. Berlage notes:
While the local highs of the weak hands tend to be lower, we cannot confirm that the recent increase in the speculative base has reached its peak. However, the broader trend suggests that the stronger hands belong to the short-term age groups rather than the speculators. ”
Bitcoin’s unrealized gain indicates that the rally may continue
In July 2019, Bitcoin was priced at around $ 14,000. At the time, Glassnode CTO’s Raphael Scholes Kraft said Bitcoin had a relatively unrealized surplus of 0.64.
Relatively unrealized Bitcoin profit. Source: Glassnode
Currently, even though the price of Bitcoins exceeds $ 15,000, the relative unrealized profit is 0.53. This indicates that Bitcoin could see a wider rally before a strong pullback.