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October 5, 2022
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Bitcoin

This is not the end of the BTC boom – says Glassnode –

After hitting a record high of $ 58,330.57 a week ago, Bitcoin’s price dropped to $ 46,200. Is this the end of the BTC boom?

This sudden correction has apparently caused many nightmares to investors around the world. However, the data suggests that this panic is somewhat premature. Rekt Capital recently shared a photo on Twitter that suggests we’re still at the beginning of the bullish cycle. Following the pattern that BTC has followed over the last two cycles, it looks like the target price is around $ 180,000.

Glassnode’s co-founders analyze the current bull cycle – this is not the end of the BTC boom

Glassnode co-founders shared their analysisin which they show why the current Bitcoin cycle still has a lot of room for price development. According to their observations, retail investors have been the main driving force in the market since mid-December 2020.

According to Glassnode:

Right now, short-term consolidation is really healthy and increases the chances of a higher target peak. As new purchases have a higher cost base in the fomo environment, no one will sell at a loss.

There are three more elements that tell us that the current price adjustment is actually quite healthy for Bitcoin:

  1. Most of the technical indicators had a chance to cool down, showing that the value of assets is no longer overvalued.
  2. CME Bitcoin futures have also had the opportunity to reset during the current consolidation.
  3. The number of options open also indicates that price expectations are still very high. As of February 24, there were 6 thousand. Call options with an exercise price in the range of 80-100 thousand.

Supply question

Bitcoin is at a special moment right now. There is just over 2.5 million BTC left to mine, and demand is at an unprecedented level due to the presence of institutional investors. Therefore, the supply of BTC has not been so limited for a long time.

Long-term holders seem to be less worried about this decline than the last one, which brought BTC from $ 42,000 to $ 29,000. According to various indicators, these hunters do not intend to deplete their positions any time soon. In addition, institutions will continue to seek to diversify their holdings, resulting in some solid levels of price support.

For anyone asking themselves who would likely buy so many bitcoins at these price levels, it’s important to understand how these big companies function and how they manage their risk. For many of them, the $ 40,000 BTC is more attractive than the uncertain $ 8,000 BTC.

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