Despite the notable rise in Bitcoin (BTC) price in November Bitcoin price is consolidating over $ 15,000and the chain’s analyst Willy Woo says price increases are unlikely for three main reasons.
The three factors are increasing Outflow of funds from exchanges, the rise of “HODLers” and data to show that investors have already made profits.
According to Coinmarketcap, Bitcoin’s market cap is currently $ 286,937,402,262.
Bitcoin is switching from exchanges to individuals’ wallets
According to Glassnode In late October, a large amount of Bitcoin left the central exchanges.
Woo says this metric is bullish because it shows investors are transferring money from trading platforms to their personal wallets. This indicates that Users consider their BTC as a long term investment strategy.
The analyst noted this Bitcoin is the cryptocurrency that has seen the most IPOs in a single day in the past five years. He explained that:
“A ridiculous number of coins have been put into individual wallets. If you look at it from a distance and put that into perspective, the biggest one-day move is on this 5-year chart.
The number of “HODLers” is increasing
In the cryptocurrency market Analysts refer to longtime Bitcoin owners as “HODLers”. That said, they are the ones who tend to hold onto BTC for long periods of time, often for more than a year.
Before Bitcoin’s steep rally began, leading to new multi-year highs, Woo said so The number of Bitcoin HODLers increased significantly. Highest high since October 2017That was just a few months before the price of Bitcoin hit its all-time high in December. Woo noted that:
“Before this pumping, the flow of new HODLers on the blockchain skyrocketed. I repeat, it skyrocketed, I’m not kidding. This amount of uptake was last seen in October 2017 – that was a month before BTC got into its mania -Enter phase of 2017 “.
The high number of HODLers is an important metric as it shows the real retail demand behind the uptrend. A bullish Bitcoin price rally could be vulnerable to a sharp decline if it is led primarily by the futures market.
Lower risk of depth correction
The Bitcoin’s Production Spent Profit Index (SOPR) is an indicator of whether investors are benefiting from their unrealized profits.
Data from Glassnode shows that a relatively large number of investors have benefited from it over the past week. This shows that The risk of a large drop in profits is less as investors have already started to realize their profits while these coins were being absorbed by the market buyers.
Based on the three data points, Woo emphasized this he doesn’t see a blow-off top going to happen. The term “Abblasobteil” refers to a technical training in which the The price of an asset drops sharply after reaching a high level of resistance. Courting wrote::
“Overall conclusion: no discount expected. Wait for consolidation to complete and then further bullish action.”
In the short term, the risk to Bitcoin’s current bullish rally remains the crowded futures market. The analysts therefore expect a certain consolidation, at least for the time being, but no profound correction.
Don’t stop reading: