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3 reasons why the price of Bitcoin could be on the verge of a new upward trend

June 8, 2020

The price of Bitcoin (BTC) has increased 170% in the past three months from USD 3,600 to USD 9,700. Despite this immense 3-month recoveryA number of fundamental factors indicate the possibility of another short-term upward trend.

Three reasons why Bitcoin is likely to see a recovery are an increased currency outflow, the search for miners for income support, and the increasing number of so-called “hodlers” or investors who hold BTC. for longer time.

The coincidence of three imperative factors prepared Bitcoin for an increase

If the outflow of bitcoin from the exchanges increases, this indicates that investors are preparing to hold BTC in the long term.

3 reasons why the price of Bitcoin could be on the verge of a new upward trend3 reasons why the price of Bitcoin could be on the verge of a new upward trend

Mostly, Exchange users withdraw Bitcoin with the intent to send BTC to a personal wallet. This trend often indicates that users will have less appetite for trading Bitcoin in the foreseeable future.

The decline in the Bitcoin exchange rate is accompanied by a recovery in miners’ income. Because miners generate more BTC through miningWith the recent adjustment of dump rate difficulties, existing miners are becoming more profitable.

As bitcoin mining operating costs decrease, the need to sell more BTC to large mining centers in the short term could also decrease. There is a possibility that some of the BTC runoff will come from the miners.

Verifiable data from the chain shows that miners sold less Bitcoin than last week. Miners have mined approximately 6,694 BTC in the past seven days, and data shows that they have sold 6,384 BTC, which corresponds to a positive inventory of 310 BTC.

Bitcoin miners sold less than last week

Bitcoin miners sold less than last week. Source: ByteTree

A cryptocurrency trader known as a Byzantine general wrote::

“The outflow of the stock market continues to increase. Miners’ incomes find support. Miners are hoarding more and more. Although the graphics don’t seem very exciting, I wonder where the bass players think the big one comes from? Sales pressure.”

Overall, miners have moved less bitcoin and put less selling pressure on the spot price. The combination of fewer sellers in the Bitcoin market and a steady increase in long-term hodlers increases the likelihood of a continuous rally.

There is a variable that can ruin the upward trend

The prediction of a new phase of increasing momentum for Bitcoin in the short term is mainly based on the assumption that miners won’t sell much BTC in the coming months.. However, the sharp price changes at BTC and the difficulty in extracting BTC could quickly lead to a turnaround.

An ideal scenario for a strong recovery in the third quarter of 2020 would require Bitcoin’s price to remain stable above $ 10,000. and that the amount of BTC sold by miners every day continued to decrease.

In this case, this would indicate that the price of Bitcoin broke multi-year resistance with increasing confidence from both investors and miners, enabling an appropriate long-term bull market.