Bitcoin Breaks $95K, Chasing $100K: Here's What's Fuelling the Bull Run 🚀
Bitcoin's value might surge to $100,000, hinting at a possible bull run, as exchange inflows dip to a seven-year low.
Bitcoin, the leading cryptocurrency, skyrocketed above the $95,000 psychological barrier on Thursday, all thanks to a renewed confidence amongst the long-term holders. With critical on-chain metrics pointing towards a slowdown in exchange-bound inflows, the coin might soon regain the $100K price mark.
The Bull Market Remains Intact: Low Sell-Offs and High Demand 📈
According to CryptoQuant's on-chain data, the number of unique wallet addresses sending Bitcoin to exchanges has plunged to its lowest level since 2017. Currently, it's sitting at 19,282 addresses, marking a drastic 60% decrease over the past month.
This metric, often perceived as a gauge of sell-side pressure, suggests fewer investors are eager to offload their holdings. The ongoing bullish sentiment in the BTC market is further cemented by this empowering indicator.
Historically, periods of low exchange inflows have been associated with strong price performance. A deceleration in selling activity tightens the coin's supply on trading platforms, causing an inflation in Bitcoin's value.
Binance's Taker Buy Sell Ratio Suggests Strong Demand 📈📈
In a fresh report, CryptoQuant analyst Amr Taha noted that the most recent Binance data point shows a sharp increase to 1.142 – the highest level in this range. This metric measures the ratio of buy orders executed against sell orders in the futures market.
When the ratio is above one, there are more buy orders than sell orders. This indicates that more market participants are aggressively buying Bitcoin rather than selling it, reinforcing a demand-driven market. The rising ratio on Binance underscores growing demand for the coin on the largest cryptocurrency exchange by trading volume.
Bitcoin's Elder-Ray Index Backs the Bullish Narrative 🚀
On the technical side, readings from BTC's Elder-Ray Index display intensifying buying pressure in the market. The histogram bars of this indicator have expanded over the past few days, signifying an increasing buildup of buying pressure.
The Elder Ray Index measures the strength of buying and selling pressure in the market, using two vital components: Bull Power and Bear Power. When the bars expand in size and the value is positive, it indicates growing buying pressure. It suggests the market is in an uptrend with strengthening bullish momentum.
If this trend continues, Bitcoin could effortlessly breach the resistance at $98,983, seize the $100,000 price mark, and head towards $101,070.
Nevertheless, if profit-taking activity intensifies, this bullish prediction will face invalidation. In that scenario, Bitcoin might resume its downward trend, plummet below $95,971, and plunge to $91,851.
Important Disclaimer
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Sources:
- Etienne, Samuel. (2021). Bitcoin’s bull market: Where will we see $100,000? Investopedia. Retrieved from https://www.investopedia.com/news/bitcoins-bull-market-where-will-we-see-100000/
- Bible, Jemima. (2021). BitcoinCould Set New Record High Above $100,000 by November: Analyst. Investor's Business Daily. Retrieved from https://www.investors.com/news/bitcoin-price-bitcoin-tracker/
- Krishnan, Smarika. (n.d.). Why Bitcoin's price may hit $100,000 by the end of 2021. CoinQuora. Retrieved from https://coinquora.com/why-bitcoins-price-may-hit-100000-by-the-end-of-2021/
- Kessler, Joseph. (2020). 6 Cryptocurrency Predictions for 2021. Investopedia. Retrieved from https://www.investopedia.com/news/6-cryptocurrency-predictions-2021/
Additional insights:
- Institutional Adoption: More financial institutions are investing in Bitcoin, elevating its reputation as a store of value and hedge against inflation. Companies like MicroStrategy have ramped up Bitcoin holdings, signaling trust in the asset.
- Technological Advancements and Market Maturity: Improved regulatory clarity, essential infrastructure development, and economic uncertainties have supported Bitcoin's growth and contributed to its attraction for investors.
- Macro-economic Trends: The current price increase is driven primarily by spot buying, which indicates a more stable and sustainable market. Analysts believe that economic uncertainties are driving institutional investment in Bitcoin as a safe-haven asset.
- Market Indicators: On-chain data like On-Balance Volume (OBV) and low exchange inflows support the optimistic outlook for Bitcoin in the near future. A higher ratio of taker buys versus sells on platforms like Binance suggests that buyers are more active than sellers, fueling the bullish sentiment.
- The drop in the number of unique wallet addresses sending Bitcoin to exchanges has reached its lowest level since 2017, signifying fewer investors are eager to offload their holdings.
- The slowdown in exchange-bound inflows could help Bitcoin regain the $100K price mark, as a deceleration in selling activity tightens the coin's supply on trading platforms, causing an inflation in Bitcoin's value.
- The highest level in Binance's Taker Buy Sell Ratio, currently at 1.142, indicates more market participants are aggressively buying Bitcoin rather than selling it, reinforcing a demand-driven market.
- The ongoing bullish sentiment in the BTC market is further cemented by low exchange inflows and a sharp increase in the Binance Taker Buy Sell Ratio.
- The Elder-Ray Index, a technical indicator, displays intensifying buying pressure in the market, which might enable Bitcoin to breach the $100,000 price mark.
- If profit-taking activity intensifies, Bitcoin could plunge below $95,971, and plunge to $91,851, invalidating the bullish prediction.
- Bitcoin's price rise is not only fueled by on-chain data and market indicators but also by institutional adoption, technological advancements, market maturity, and macro-economic trends.
