5 essential causes Bitcoin is prone to see new all-time highs quickly

Bitcoin (BTC) price has been under strong selling pressure from whales for the past two months, data from the chain shows.

However, five key indicators suggest that top sellers are on the verge of becoming Bitcoin hodlers or even hoarders again. while institutional demand remains high. This is an explosive setup that can push Bitcoin to new all-time highs in the short term.

The whales stopped selling

The number of whales considered to be Bitcoin addresses with a balance of 1000 Bitcoin and up has declined more than 10% since Feb. 8, suggesting a major Bitcoin sell-off.

While the price of Bitcoin hit two all-time highs during the two-month dumping period, the overall price surge has slowed significantly and the price found strong resistance at around $ 60,000.. However, since March 31st, the big Bitcoin holders stopped selling.

Bitcoin: Number of addresses with credit> 1k. Source: Glass Knot

The reorientation of the portfolio by the institutes is typical for billing a quarter ago. Since Bitcoin has seen a 104% price increase since the beginning of this year, that’s to be expected.

Grayscale, the largest digital asset manager, announced yesterday that it was realigning its large-cap digital fund at the expense of selling Bitcoin.

If the realignment is the main driver and if it is taken into account that the number of addresses with at least 1,000 BTC is back at the level last reached at the end of the year from which the significant price hike began, the whales may have been sold out by now.

Long-term traders selling Bitcoin are slowing down

When Bitcoin broke the 2019 high last October, it started not only one of the fastest rallies, but also one of the longest on Coin Days Destroyed (CDD).

This on-chain metric expresses the weight with which Hodler sells over the long term. It is calculated by multiplying the number of coins in a transaction by the number of days that have passed since those coins were last spent. This means the higher the coin days destroyedthe more volume they’ll sell.

Since the beginning of the year, however, long-term Hodler sales have not only slowed down drastically, but are almost back to the level from which the sell-off was originally triggered last year.

Bitcoin: Coin Days Destroyed (CDD) 21-day moving average. Source: Glass Knot

This suggests that long-term hodlers are increasingly convinced of a higher short-term Bitcoin price.

Miners have become bitcoin hoarders again

Since bitcoin miners’ source of income is freshly mined bitcoin, they have to sell their mined bitcoin on a regular basis to pay for their operating costs such as electricity bills. However, some miners are more likely to be price speculators.

By slowing down Bitcoin sales, they become net accumulators. This is expressed in the miner’s net change in position, which shows the 30D change in supply in miners’ addresses.

Bitcoin: Coin Days Destroyed (CDD) 21-day moving average. Source: Glass Knot

The last time miners hesitated to sell their Bitcoin was right before a huge price spike that happened almost three months ago. This positive change suggests that miners expect higher prices in the near future.

Institutional demand remains high

Despite significant sales pressure from the whales, institutional demand for Bitcoin has not slowed. The net volume of Bitcoin transfers to / from exchanges is very much in the red, almost at an all-time low, which means that currently more Bitcoins are withdrawn from exchanges than deposited.

This is a sign that these coins are being placed in a cold store. This is typical for institutions as they tend to make long-term investments and prefer more secure custody solutions than leaving them on an exchange.

Bitcoin: 14-day moving average of net transfer volume to / from exchanges. Source: Glass Knot

The biggest exchange rate crisis in Bitcoin’s history has been a phenomenon since the pandemic. It has become even more material as institutions have accumulated on a larger scale since November 2020.

This is evident from the continued sharp decline in the Bitcoin account balance on the exchanges, especially on Coinbase, which has been frequented mainly by institutions in recent months.

Bitcoin: credit in exchange. Source: Glass Knot

In the meantime, Coinbase released its first quarter results and outlook yesterday, which states:

Assets on the platform of $ 223 billion, which is 11.3% of the market share of crypto assets, include assets of $ 122 billion on the institutions’ platform. … We expect significant growth in 2021 driven by transaction and custody revenues as institutional interest in the crypto asset class has increased.

Not only is it certain that the institutions have increased their revenues significantly, but it also shows your confidence that this buying trend is unlikely to end anytime soon.

Weekly ascending triangle near a breakout

A weekly ascending triangle has formed since the beginning of February. Statistically speaking This chart pattern offers a greater chance of breaking higher than lower.

If the price would break higher The size of the triangle suggests a possible breakout target towards $ 79,000. While neither the upside breakout nor price target is a certainty, it is a chart worth watching alongside key signals in the chain.

1-week BTC / USD candlestick chart. Source: trade view

Forces in the market, be they long-term hodlers, miners, or whales, are showing signs of confidence in a rising Bitcoin price.

The ascending triangle gives even more reason to believe that this move may be imminent and directed upwards. While no one would care about a $ 79,000 bitcoin price in the near future, a triangle split is also an option to consider as not all of the major signals in the chain are fully aligned yet.

The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph. Every investment and trade movement is associated with risks. You should do your own research when making a decision.

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