There are 4 key indicators that could boost Bitcoin price achieve $22,000
With Bitcoin price likely to reach $ 17,000 in the near term, quite a few analysts are very optimistic about the future of this market-leading cryptocurrency. In it, the founder of Lookintobitcoin.com, Philip Swift, gave four compelling reasons to believe that Bitcoin is headed for $ 22,000. Both fundamental and technical factors show that the momentum of the leading cryptocurrency is intensifying.
– 1yr HODL % still really high? Yep
– bitcoin being rushed off exchanges? Yep
– funding still neutral? Yep
– Institutions still buying? Yep
Cool, See you at $22k in a few weeks when price reaches the 350dma x 2 of the Golden Ratio Multiplier. pic.twitter.com/pI84kJwmhh
— Philip Swift (@PositiveCrypto) November 16, 2020
4 factors that prove Bitcoin price will increase to $ 22,000
The first factor to consider is the percentage of Bitcoin hodl in a year of investors. Since the price crash in March, the one-year wave of coin hodl has increased from 59% to over 62%. And this rate is currently at an all-time high, showing a clear cumulative trend.
As the number of hodlers increases, it appears that the trend to buy and hold Bitcoin will also increase. The on-going trend may suggest that investors expect a broader Bitcoin rally in the long term.
The One-Year Bitcoin HODL Wave | Source: Lookintobitcoin
The second factor is a decrease in Bitcoin exchange reserves. As of yesterday, around 145,000 BTC were moved out of exchanges during the past month. A monthly flow of Bitcoin worth $ 2.3 billion shows investors’ intention to hold their Bitcoins over the long term.
Investors must deposit Bitcoins into exchanges to sell their holdings. Hence, when cash outflows increase, it often shows that investors plan to hold Bitcoin for the long term.
A third factor to consider is neutral funding rates. During bullish cycles, Bitcoin’s funding rates can spike when long holders or buyers overwhelm short-term sellers.
Bitcoin futures markets use a funding ratio mechanism to ensure a balance in the market. If there are more dresses than shorts, the funding rate becomes positive. If so, the buyer must compensate for the short seller and vice versa. The average funding rate of Bitcoin perpetual futures contracts is around 0.01%. The funding rate has remained around 0.01% or sometimes lower than that throughout the past several months.
This shows a good balance between the buyers and the sellers, and the market is not too hot yet.
And finally, the stakes hold for a prolonged BTC rally. In the United States, Grayscale remains the preferred entry point for institutional investors in Bitcoin. Grayscale Bitcoin Trust is the closest investment vehicle to an exchange-traded fund, as it is publicly traded in the US.
Grayscale Bitcoin Trust now holds more than 500,000 $BTC. Yes, you read that right. Learn more about the world’s largest #Bitcoin investment product. #GoGrayscale https://t.co/2sEpUdw8iN pic.twitter.com/9h8nGZ8i4t
— Grayscale (@Grayscale) November 16, 2020
According to Grayscale, the company currently holds more than 500,000 BTC, for $ 16,700, worth more than $ 8.35 billion. Institutions have continued to accumulate Bitcoin as it announced a strong recovery since the beginning of 2020. Bitcoin’s resilience, especially since it consistently outperforms gold, has made the recommendation for storage the value more attractive to organizations throughout the year.
You can see the Bitcoin price here.
- Elon Musk Just Name-Dropped Bitcoin Once Again On Twitter, Bitcoin Price Will Hit Highs?
- Bitcoin Exchange Outflows Dropped From 2.5 Million To 2.355 Million As 145,000 BTC Moved Out Of Exchanges