Is Bitcoin finally Bullish?

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By Alpha Roc on The Capital

Photo by bantersnaps on Unsplash

Something is brewing in the Bitcoin market that could signify potential bullishness in the prices of Bitcoin, we will take a look at three signs that could indicate the possibility of a potential bull run.

First, let us take a look at the technical aspect of the price of Bitcoin.

Price chart of Bitcoin on Bitfinex

Bitcoin prices have been ranging for the last three months, and recently, a descending triangle pattern was formed, and a strong break out at the yellow shaded region was spotted. This is a sign of bullishness, and price of bitcoin is looking to retest the 10,000 level.

Miners

Data from ByteTree shows that, in the past three months, miners produced 7,293 BTC, and sold only 7,365 BTC. This is considered low selling pressure, more so when it is over a prolonged period. Two possible reasons contributing to the low selling pressure could be the high hash rate and low mining costs. And since miners are one of the two major external sources of selling pressures in the crypto market, along with exchanges, the low selling rate from Miners could likely lead to higher Bitcoin prices.

Exchange

Since March, inflows into Bitcoin spot exchanges have noticeably dropped. Data from CryptoQuant shows inflows are hovering in between 3,700 BTC and 17,000 BTC. In May, inflows were ranging between 6,800 BTC and 38,000 BTC. Low exchange inflows typically suggest that there are fewer investors or traders selling cryptocurrencies in the market. Conversely, exchange outflows indicate that more investors are moving Bitcoin to personal wallets. Ki explained that a reasonable period to invest in Bitcoin is when whales send funds out of exchanges. That shows whales are predicting an upcoming rally in the prices of bitcoin.

Bitcoin exchange reserves have dropped substantially since mid-April. In the last three months, exchange reserves declined from 2.56 million to 2.44 million. Although a 4% drop in exchange reserves could seem minor, exchange reserves never dropped to the low-2 million levels for well over a year. With more people holding on to their Bitcoins, as compared to selling, it shows that the sentiments of Bitcoin are turning bullish.

Conclusion

A confluence of low selling pressure from miners, declining exchange reserves, and low inflows could indicate the start of an accumulation phase. Both retail investors and miners are selling less BTC than usual and institutional investors are accumulating BTC. With the price chart of BTC just turning bullish, only time will tell if we will be able to see a new 2020 high.

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Is Bitcoin finally Bullish? was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.

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