What’s on the horizon with the new news about Bitcoin miners: trend reversal or continuous recovery?
Bitcoin is currently trading at $ 33831 after a highly volatile and eventful week. Before the weekend, Elon Musk’s tweet led to a huge price increase, bringing it close to the $ 40,000 level. However, there is consistent resistance and the price has dropped to $ 33,000. There were a number of metrics suggesting a settlement before the price rises and they remain consistent from now on. Outflow flows from Bitcoin miners have reached record highs, with transactions from miners to exchanges registering an annual high.
Exit of Bitcoin miners || Source: Twitter
The increase in demand, when the price started to rise again, may have contributed directly to the increase in market capitalization, since it reached an ATH of $ 218 billion. Although mining outputs have increased, Bitcoin’s price has remained limited. Liquidation followed the rise and the price on spot exchanges continued to fall. As sales pressure increased, trading volume fell about 50 percent from what it was in the early hours of Thursday, based on data from CoinMarketCap. So, what does market capitalization suggest, a trend reversal or a continuous recovery?
Based on the volatility of the network and the dynamics of Bitcoin, on the Woobull charts, despite the outflow and increased selling pressure, the price hike may continue, after closing this month below $ 35,000. The drop in demand is as temporary as ever, however, the supply was projected to fall as we approach 21 million Bitcoin. This may be a key factor for the price limited by a range and the periodic volatility, within the same market cycle. What the double spending rumor did, and what stocks like Game Stop are doing on Wall Street, could end up with zero impact on the flow of Bitcoin investment in the long run.
In addition, the accumulation of whales at different price levels above $ 30,000 created support above that price range. There are other factors, like explosive interest and investment flow in DeFi and a possible altcoin rally, with Ethereum leading the way. However, with Bitcoin’s dominance at 62%, there is room to follow the S2F model and another price hike that may only allow for price discovery beyond $ 40,000 in February 2021.