A combination of multiple indicators that track Bitcoin (Bitcoin) Popular on-chain analyst Willy Woo predicts that the blockchain will further increase the price of the benchmark cryptocurrency until 2021.
in his Recent newsletter, The market researcher wrote that he expects the price of Bitcoin to reach the range of $50,000-65,000 in the next few trading days. His comments appeared when BTC/USD returned to a three-month high above 42,600 after only a few days after falling below 30,000 USD (the currency pair’s psychological support level).
“My expectation is similar to that of BTC’s record high of US$20,000 in January. Within a few days (up to 2 weeks), the price is close to the upper limit of US$40,000 to US$42,000, exhausting sellers, and then moving faster to 5 Ten thousand dollars,” Woo said.
“The next major consolidation range is US$50,000 to US$65,000.”
BTC supply is tight
Bitcoin price rises while receiving supportive comments Elon Musk at Tesla, Jack Dorsey of Twitter and Cathie Wood of Ark Invest in July.Cryptocurrency also rises due to rumors of global retail giant Amazon Will start accepting it as payment, The company later refuted this claim.
At the same time, after Federal Reserve Chairman Jerome Powell admitted at a press conference last Wednesday that there was a possibility of a temporary inflation shock, Bitcoin also soared to $42,600. Specifically, cryptocurrency bulls see Bitcoin as a hedge against rising consumer prices.
It’s worth noting that this period Bitcoin price rebounded from below $30,000 It coincides with the intensified shock of the liquid supply. Specifically, BTC was withdrawn from the exchange, as Woo suggested, because powerful holders locked it up for long-term investment.
“As of today, the Liquid Supply Shock indicator is at a level consistent with the $55,000 price level,” the analyst wrote on August 1, noting that there is a large deviation between the available supply and the current Bitcoin price.
“Despite a strong 44% rebound in less than 2 weeks, we are still in the BTC’s heavily discounted zone.”
China’s May ban on cryptocurrency activity played a key role in driving the price of Bitcoin lower this summer. The decision paralyzed the regional crypto mining industry, which accounts for more than half of global bitcoin production.
Glass node Report In June, miners either shut down their drilling rigs to comply with the new law or moved their operations outside of China, incurring additional costs to keep production running.
The data analysis platform also pointed out that miners may liquidate some of their Bitcoin holdings to pay additional fees. However, it turns out that the trend of miners’ net increase in BTC holdings reversed in May, showing surrender.
But as Woo pointed out, the miners resumed the accumulation of Bitcoin in July.He cited the popular Bitcoin hash ribbon indicator, which tracks the expansion of the network and the loss of hash rate, noting that it has recovered for the first time since then China ban.
Woo wrote: “The functional area recovery event means the end of the miners’ sell-off (this is what they did when they went out of business).”
“Normally, the recovery of functional areas opens the way for months of bullish price action. This indicator does a very good job of locating the bottom of prices.”
Whale activity surges
Seen in the past week Strong buying of whales, Woo added, and pointed out that Bitcoin climbed from $29,300 to more than $42,600.
Whales usually represent entities that hold more than 1,000 BTC in their Bitcoin addresses. Although they do not fully influence the market’s directional bias, their buying with relatively small Bitcoin investors indicates a strong bullish situation.
The analyst pointed out that all investor groups, big or small, buy Bitcoin for 9 consecutive days, even if he has never seen it in the life cycle of a cryptocurrency.
“At present, the buying of all groups is very bullish,” Woo said. “When everyone is buying, who is the seller? The seller is the trader. The coins sold by the trader reduce the speculative inventory on the spot exchange.”
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