On March 11th, Bitcoin reached $57k, just below its all-time high, after falling to a low of $43k in February. Today, the coin hit $62,000. With Bitcoin managing to regain the lost ground in such a short period of time, analysts remain bullish on the future of the asset’s price.
While after the initial 2017 crash, Bitcoin regained much of its price loss quickly – only to lose more than 80% of its value in the weeks later – there is reason to believe that this time is different.
Bitcoin On-Chain Analysis
Bitcoin analyst Willy Woo believes that the 5% of total supply bought above $53k (at a one trillion market valuation) is a strong indicator for the bullish sentiment of retail and institutional traders.
Bitcoin is once again near all time highs. There's solid amount of on-chain support below here.
Chart: showing just how many coins were bought by at each price by current investors. A nice confirmation of the validity of these price levels. pic.twitter.com/doKo5mCvp5
— Willy Woo (@woonomic) March 11, 2021
Investors were clearly not panicked by the dip and took the opportunity to accumulate another ~900,000 BTC.
The analyst also points to 35% of the total supply that has been bought in the past three months. This suggests that the market believes BTC is still, at the very least, an undervalued asset – or an alternative to the currently volatile equities market.
Technicals Indicate There is Room to Grow
In terms of technical indicators, according to Central Charts analysis, BTC has broken through its horizontal resistance on the weekly timeframe – another bullish signal. Bitcoin has also experienced a price channel breakout, a move that is typically followed by a dramatic appreciation in the assets market value.
While not a guaranteed movement, these two technical indicators used in conjunction with the rapidly diminishing supply of BTC taken at current price levels shows that there is reason to be optimistic about the coins price.
Bitcoin price movement in the past week has also been making waves due to it significantly outperforming the QQQ NASDAQ technology index over this time period, with the QQQ down 1.72% compared to Bitcoin increasing 15% from March 1st to March 11th.
Bitcoin has usually been at least somewhat correlated to the movements of the US tech equities market, however with rising fears of increased inflation – money has fled out of traditional tech and into other assets like Bitcoin.
Should this trend continue, Bitcoin will continue to become seen as a store of value against inflation and other macroeconomic threats.
Source: Bitcoinist News