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After declining at $ 15,960 on November 6, the price of Bitcoin (BTC) strongly defended the $ 15,000 support level. Based on four on-chain data points, analysts believe the rally could continue beyond $ 16,000.
Analysts identified lower Bitcoin trading reserves, unchanged supply, an increase in “strongest hands” and unrealized profits as factors for the rally to continue.
The number of BTC held in exchanges decreases
Recently, Delphi Digital, an independent cryptocurrency research and consultancy firm, released a report on the outlook for the Bitcoin market.
Delphi analyst Paul Burlage said on-chain metrics generally show strong momentum for Bitcoin.
Since February 11, Bitcoin’s exchange reserves have dropped from 2.96 million to 2.41 million. In dollar terms, a decline of 550,000 BTC is equivalent to $ 6.36 billion.
The drop in Bitcoin exchange reserves is an optimistic event because it means fewer sellers are depositing BTC in exchanges. Burlage She said:
“On February 11, 2020, $ BTC on exchanges reached its all-time high of ~ 2.96 million. At the time of writing, $ BTC on exchanges is at ~ 2.41M. This current trend has seen a divergence between shares and the price of BTC, which suggests a more sustainable upward move for $ BTC. “
BTC supply peaks not shifted
Although fewer sellers are moving their funds on the stock exchange, the unchanged supply of BTC remains high.
On September 9, Burlage explained that the unchanged bid percentage for BTC hit an all-time high at 63.5%. Since then, it has dropped slightly to 62%, but considering that the price has increased significantly, that’s a positive metric. He explained:
“Over the past year in the last week we have seen a slight decline in the percentage of non-moving offer. After reaching an all-time high of approximately 63.5% of uneventful supply on 9 September, we are currently at around 62.0% “.
This shows that investors are raising BTC “HODLing” despite the recent rally, yet not making big profits.
No clear sign of a peak yet
The number of “weak hands” or speculative buyers has decreased significantly in recent weeks, while the stronger hands have strengthened.
The flow of short-term buyers and the entry of long-term “HODLers” indicate that Bitcoin could see a prolonged rally.
This trend coincides with Bitcoin’s resilience above $ 15,000 and shows that the once heavy resistance level is about to evolve into a support area. Burlage noted:
“Although the local highs for ‘weak hands’ are trending down, we cannot confirm that the recent rise in the speculative base has formed a high. That said, the broader trend suggests stronger hands are populating short-term age groups rather than speculators. “
Unrealized Bitcoin profits signal that the rally could continue
In July 2019, the price of Bitcoin reached a peak of around $ 14,000. At the time, Glassnode Technical Director Rafael Schultze-Kraft She said Bitcoin’s unrealized relative profit reached 0.64.
Currently, despite the price of Bitcoin being above $ 15,000, the relative unrealized profit is at 0.53. This shows that BTC has the potential to see a larger rally before a strong pullback.
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