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Following an exponentially positive start to the year, Bitcoin and the broader cryptocurrency sector have cooled in recent weeks. Since reaching an all-time high of nearly $62,000 just under two weeks ago, the world’s largest cryptocurrency has traded in the $50k-$55k range for the majority of the time since, following a wave of corrections.
This was still the case at the time of release, with Bitcoin having stabilised considerably after slipping below $51,000 as a result of the $1.6 billion Bitcoin Options expiry-precipitated sell-off. However, emotions correlated with cryptocurrency success remain optimistic as ever, suggesting that the bull run might not be over quite yet.
Why is this the case? To begin with, though the price did depreciate dramatically in the run-up to the Options expiry on the 26th, Bitcoin’s previous Options expiries have caused a recovery on the charts.
If it was the September 2020 Options expiry that helped drive BTC past its 2017-ATH of under $20,000 or the December 2020 Options expiry that helped BTC easily break $50,000, there is ample cause to anticipate a bullish result to the new expiry’s long-term prospects. After all, the Open Interest on the same was the highest seen in any recent expiry, and it also attracted the highest rate of liquidity.
Furthermore, though Bitcoin corrected itself, the In/Out of the Money around Price indicator showed that a massive “cluster of addresses (677k) and value (440.097k BTC) was purchased just below $53,270.” According to the most recent issue of IntoTheBlock’s newsletter,
“This price range, which already saw high levels of trading activity, points to the likelihood of investors looking to buy back near this range and create support before price lowers further.”
The crypto-data analytics framework also stated that a related cluster could be located between $48,503 and $50,132.
What exactly does this mean? The scale of the clusters, as well as their location in relation to Bitcoin’s most recent price movement, all point to the above ranges serving as solid support thresholds for the world’s largest cryptocurrency. They are unlikely to be breached until anything drastic occurs.
A variety of other metrics, all of which favour the bulls in the market, support the above claim. For eg, IntoTheBlock’s HODLers indicator has seen steady monthly progress, recently reaching an all-time high of 21.55M addresses.
The UTXO Age Metric should also be investigated, as the measurement is often used to forecast long-term demand cycles. According to the same, “investors continue to hang on to their BTC assets,” with the forum noting that,
“…. taking into consideration that a large portion is reported to be lost or stolen, it is clear that investors see that this bull-trend still have a long way up, increasing the supply scarcity of the asset.”
Finally, the overall number of transactions reported on-chain has been gradually rising, reflecting the extent of confidence in Bitcoin’s long-term prospects.
It should be noted, though, that phrases like “long-term opportunities” may be too broad and unclear. As a result, it’s worth noting that many market participants are betting on a strike price of $80k by the end of April. Simply put, many buyers are betting on Bitcoin to break out of the tiny rut it has been in recently, before surging to overshoot its current ATH by nearly $20k on the market charts.
Will it happen now? With a little more than a month before the same, it’s a little early to say. What is certain, though, is that Bitcoin’s bull run could be about to resume.