More institutions accumulate BTC because of the fear of dollar-linked inflation which is why there’s a strong chance that BTC will hit $50,000 in the upcoming sessions. BTC could even shoot higher if more institutions start accumulating it again so let’s read more in today’s Bitcoin news.
The number one cryptocurrency that has a market capitalization above the one of Tesla or Facebook dropped lower from the record high of $42,000 but the drop prompted the richer traders and institutions to buy it at cheaper rates which led to further liquidity crunch against the limited supply of 21 million tokens. As a result, the BTC price is consolidating sideways and is now forming a structure that looks like a symmetrical triangle, and this pattern in the past formed when the price was forming higher lows and lower highs. In the meantime, the trading volume dropped and the price broke out of the direction of the trend no matter being downward or upward.
BTC’s previous trend was quite bullish so the crypto’s possibility of going through another bull run is higher on the breakout move out of the Triangle pattern which should lead the coin above $50,000. This is again because of this symmetrical triangle that we described above. The asset breaks out by about the maximum height between the upper and lowers trendlines of the pattern and in Bitcoin’s case, the height is around $14,000 which is a move that could take the BTC price above $50,000.
The price target looks like it could be achieved according to analysts that determine their market bias on the on-chain indicators. For example, the data analyst at Glassnode outlined BTC’s biggest liquidity depletion to date in the past weeks hinting that this is quite bullish for the cryptocurrency:
“Not only are funds being withdrawn from exchanges, but coins are continuously moving to strong hands,” they stated. “In the past 30 days, around 270,000 BTC moved to entities considered HODLers.”
The Glassnode charts are much more important than the price charts as BTC’s supply is now being withdrawn from all exchanges at a fast pace as Luke Martin added:
“Historically, bull cycles have ended AFTER liquid supply change flips positive. That flip has not happened yet.”
Part of the reason is a comparatively higher demand for the benchmark cryptocurrency amid the ongoing anti-inflation narrative. With Joe Bide’s inauguration, the prospects of more government spending are increasing in order to fight against the COVID-19 Pandemic. These fears of inflation pushed companies like Square and Microstrategy to exchange a portion of the dollar reserve for BTC but investors like Paul Tudor Jones and Stan Druckenmiller also invested a little in the cryptocurrency.
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