Quant trader explains why Bitcoin’s price is rising

Sam Trabucco, a quantitative trader at Alameda Research, believes that four general factors are driving up the price of Bitcoin (BTC).

The catalysts are increasing adoption, whales, inflows from other products in Bitcoin and influence from other markets.

Alameda Research is a leading cryptocurrency firm trading a variety of cryptocurrencies and derivatives, with volumes ranging between $ 600 million and $ 1.5 billion per day.

Overall accumulation and adoption is on the rise

Over the past month, Cointelegraph has continued to report on the progress of the accumulation of whales.

Whale clusters form when whales buy Bitcoin and don’t sell immediately. This typically indicates that the whales bought BTC, sent it to their personal wallets, and didn’t transfer their funds.

The accumulation of Bitcoin from whales could be synergized with a withdrawal of profit taking in the altcoin market. Notably, as the decentralized financial market retreated, Bitcoin continuously saw a significant rally.

Based on various trends and data, Trabucco said the four factors mentioned above likely contributed to Bitcoin’s rally over the past few months. He he wrote:

“So, first of all, why ‘up’? There has been a lot of discussion about this – some reasons why BTC rises that I have seen postulates include a lot of institutional buying, more adoption, “whales”, outflows from bizarre products in BTC, influence from other markets, etc. “

In addition to these factors, Cointelegraph reported that Bitcoin’s exchange reserves are also decreasing at a rapid pace.

Bitcoin exchange reserves dwindle as investors increasingly withdraw their funds from exchanges. As investors often deposit cryptocurrencies into exchanges to sell, this trend suggests that there are fewer sellers in the market and less available supply of BTC.

When positive fundamental and technical factors coincide with an overall decline in selling pressure, it could support the momentum around Bitcoin.

The influence of macros could also favor Bitcoin

According to Trabucco, Joe Biden’s expected victory and the prospect of Moderna and Pfizer vaccines are both positive factors for Bitcoin.

The trader argues that support for Bitcoin from various tech companies including PayPal, banks, politicians, high net worth investors, and billionaires is likely raising the price of BTC, the trader claims. He wrote:

“My opinion would be: eh probably a combination. I think Biden’s win and vaccines have been good for example for SPY which has both short and long term correlation with BTC in the COVID era, which contributed. And there are many traditional corporations / entities too – banks, hedge funds, casual riches, thought leaders, tech companies, Wyoming senators, etc. – which signal support for BTC, which both directly (purchase) and indirectly (sentiment) influence its price. “

In the short term, the roadblock for Bitcoin remains the $ 18,500 resistance area. Above, there is little resistance up to a new all-time high, after which BTC would enter the uncharted waters of price discovery.