Bitcoin whale indicator detects multi-month accumulation trend as BTC eyes $67K-retest

November 1, 2021 Coin Telegraph

Bitcoin

The "Whales Supply Shock" metric has been pretty accurate in detecting Bitcoin market tops.

Bitcoin's (BTC) biggest investors have been lately upping their reserves in sync with the ongoing price recovery, one Glassnode metric suggests.

Dubbed as "Whale Supply Shock," the on-chain indicator represents the ratio between the amount of Bitcoin held by "whales" and "fishes." Whales represent addresses that hold between 10,000 BTC and 100,000 BTC, while fishes are those that hold anything between 0.001 BTC and 1,000 BTC.

A rising Whale Supply Shock reading indicates a higher degree of accumulation by whales versus fishes. Conversely, a declining Whale Supply Shock shows fishes are accumulating Bitcoin at a faster pace than whales.

*BTC Whales Supply Shock versus price. Source: Glassnode*

That said, the Whale Supply Shock tends to provide "a measurement of supply locked in Whales wallets which can have [effect] on supply dynamics and thus on price," stated Dor Shahar, an on-chain analyst at CryptoJungle, in a tweet on Nov. 1.

BT price correlation with whale activity

The Whale Supply Shock appeared to have been predicting the macro Bitcoin price tops. For instance, the BTC price topped at near $65,000 in April, two months after the supply held by whales reached a sessional peak.

The metric showed that whales began distributing their coins among fishes, correctly predicting an upcoming macro top and correction. As a result, the Whale Supply Shock dropped, as shown in the chart below.

*BTC Whales Supply Shock recovers in tandem with price. Source: Glassnode*

It started recovering after bottoming out in mid-July, indicating that whales started re-accumulating Bitcoin at a faster pace than the fishes. That coincided with Bitcoin rebounding from around $30,000 on July 20 to eventually reach a new record high of $67,000 three months later.

The correlation was also visible around Feb 2020, noted Shahar, stating that whales began distributing their BTC "right before the ATH," adding:

"Same phenomenon happened at May of 2019, whales have accumulated up to a certain point where the supply held by them reached a peak. Once again, right before the macro top they began to distribute coins."

*BTC Whales Supply Shock peaks ahead of its spot price top in May 2019 . Source: Glassnode*

Shahar cited the said chart fractals and ruled out the ongoing recovery in the Whales Supply Shock ratio as a sign of "a multi-month accumulation uptrend." He also noted that the supply held by whales in October, when Bitcoin's price was around $62,000, is much smaller than it was in April, saying:

"[It] might indicate accumulation period or a generally depleting supply held by whales."

Conclusions: The ratio between the two groups; whales and other fishes gives a measurement of supply dynamics. Thus, can help visualize the supply shortage coins held by whales can cause and it's affect on price. Along with that, a more sensitive macro top indication.
— Dor Shahar (@dorinvesting) November 1, 2021

Bitcoin technically bullish

Shahar's bullish outlook for the Bitcoin market appeared as the cryptocurrency recovered from under $60,000 to eye a retest of its record high at around $67,000.

In doing so, BTC price appeared to have been forming a classic bullish continuation pattern called the "Bull Flag." That said, the price looks poised to break out of its ongoing consolidation range and rise by as much as the previous uptrend's height, also known as "Flagpole."

*BTC/USD daily price chart featuring potential Bull Flag setup. Source: TradingView*

The Bull Flag's profit target comes to be above $70,000.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Bitcoin hodling rate reaches 9-month high, boosting hopes of ‘bull flag’ rally to $70K

October 28, 2021 Coin Telegraph

<div>Bitcoin hodling rate reaches 9-month high, boosting hopes of 'bull flag' rally to K</div>

Analysis

The number of "hodled" and presumably lost Bitcoin tokens continues to surge in sync with the BTC price.

A yearlong price rally in the Bitcoin (BTC) market and hopes for more upside moves in the future has prompted traders to hold the token instead of trading it for other assets, Glassnode data shows.

The blockchain data analytics service revealed Thursday that the total amount of "hodled or lost coins" reached a nine-month high of over 7.21 million BTC. In simple terms, the Bitcoin metric reflected an increase in out-of-circulation tokens — those that may have been stored in cold wallets by long-term holders or got lost due to human errors, with a minimum chance of recovery.

In simple terms, the Bitcoin metric reflected an increase in out-of-circulation tokens — those that may have been stored in cold wallets by long-term holders or whose private keys are lost forever for various reasons.

*BTC amount of HODLed or Lost Coins. Source: Glassnode*

As a result, the total number of lost/hodled Bitcoin exceeded 34% of its total supply of 21 million tokens, making the cryptocurrency scarcer.

More evidences of a Bitcoin supply shock

Further data provided by CryptoQuant showed that the amount of Bitcoin reserves held across all the crypto exchanges dropped to its lowest level since August 2018 — at 2.337 million BTC on Oct. 28, 2021.

Meanwhile, the Miners Position Index (MPI), which measures the ratio of BTC leaving all miners' wallets to its 1-year moving average, has been treading below zero since March 6, 2021, suggesting strong accumulation among miners.

*Bitcoin all exchange reserves and miners' position index. Source: CryptoQuant*

"The amount of Bitcoins [owned by miners] is on similar levels that were in May when the price was under $40k," noted a CryptoQuant analyst as BTC attempted to rebound after falling below $60,000 on Oct. 26, adding:

"You can see easily how early we are still before the final bulls run."

What BTC price technicals say

Bitcoin's price correction from around $67,000 to $58,100 appeared after October's 60% rally. However, BTC/USD formed a parallel descending channel range (purpled), raising possibilities that the structure is a Bull Flag.

*BTC/USD daily price chart featuring Bull Flag setup. Source: TradingView*

Bulls Flags are bullish continuation patterns that send the price in the direction of their previous trend following a consolidation period to the downside. In doing so, the technical indicator eyes their upside targets at length equal to the size of the previous uptrend, also known as Flagpole, once the price breaks above the Flag's upper trendline with higher volumes.

The Bitcoin flagpole is approximately $15,000 long. That means the cryptocurrency could technically rise by as much as $15,000 from the point of the breakout. The Fibonacci levels in the chart above may work as floors to support rebound towards or above $70,000.

However, not all traders are convinced the current setup is bullish in the short term.

"Some would say this is a bull flag, and that's possible. But the volume characteristics point to a move lower from here most likely imo," commented pseudonymous crypto trader Alex.

Fellow trader Pentoshi added that a break below the recent lows of $58,000 would be bad news for the bulls. He said:

"BTC off 58k to the dollar What if this is a big bull flag, and that we are in a bull market where bull flags break up? Now in theory price shouldn't go back to those lows or Bitcoin is in trouble 64k down to 29k 29k back up w/ only 2 misses on the macro during that time."

Bitcoin bull market ‘2nd leg has started,’ says BTC price model creator

October 26, 2021 Coin Telegraph

Bitcoin

The popular prediction model has been remarkably accurate in the past when it comes to forecasting Bitcoin's bearish and bullish cycles against its rising scarcity.

Bitcoin (BTC) marking a new high of $67,000 last week has opened the possibility to hit $100,000 by the end of this year.

According to PlanB, the creator of the popular stock-to-flow (S2F) model, called Bitcoin's price retracement from the $60,000-level the "2nd leg" of what appeared like a long-term bull market.

#bitcoin bull market, 2nd leg has started pic.twitter.com/N9H2QF7SDe
— PlanB (@100trillionUSD) October 26, 2021

In doing so, the pseudonymous analyst cited S2F that anticipates Bitcoin to continue its leg higher and reach $100,000-135,000 by the end of this year.

The price projection model insists that Bitcoin's value would keep on growing at least until $288,000 a token due to "halving," an event that takes place every four years reducing BTC's issuance rate by half against its 21 million supply cap.

*Bitcoin after 2012, 2016, and 2020 halving. Source: PlanB*

Notably, Bitcoin underwent three halvings so far in 2012, 2016, and 2020.

Each event decreased the cryptocurrency's new supply rate by 50%, which was followed by notable increases in BTC price. For instance, the first two halvings prompted the BTC price to rise by over 10,000% and 2,960%, respectively.

The third halving caused the price to jump from $8,787 to as high as $66,999, a 667.50% increase. So far, S2F has been largely accurate in predicting Bitcoin's price trajectory, as shown in the chart below, leaving bulls with higher hopes that Bitcoin's post-halving rally would have its price cross the $100,000-mark.

*Bitcoin S2F as of Oct. 26. Source: PlanB*

PlanB noted earlier this year that Bitcoin would reach $98,000 by November and $135,000 by December of this year, adding that the only thing that would stop the cryptocurrency from hitting a six-digit value is "a black swan event" that the market has not seen in the last decade.

An 80% crash later

Despite the high price projections, Bitcoin should still see big corrections in the future. PlanB thinks the next crash would wipe at least 80% value off Bitcoin's market cap, based on the same S2F model.

"Everybody hopes for the supercycle or the 'hyperbitcoinization' to start right now and that we do not have a big crash after next all-time highs," the analyst told Unchained, adding.

"As much as I would hope that we don’t see that crash, I think we will. I think we’ll be managed by greed right now and fear later on… and see another minus 80% after we top out at a couple of hundred thousand dollars.”

*BTC/USD daily price chart. Source: TradingView*

But not everyone thinks the next correction will be as dramatic as the previous ones. Dan Morehead, the CEO of Pantera Capital, said mid-October that the next Bitcoin price drop would be less than 80%, citing a consistent drop in selling sentiment after each halving cycle.

Last week, Bitcoin (BTC) established a new record high at around $67,000 following a 53% rally in October so far. But the new highs prompted profit-taking among traders, resulting in retests of the $60,000 support level.

Ethereum eyes rally against Bitcoin, with ETH price showing hidden bullish divergence

October 25, 2021 Coin Telegraph

Bitcoin Price

The second-largest cryptocurrency will see over 8% growth against its top rival should the technical outlook play out.

Ethereum’s native token, Ether (ETH), has been declining against its top crypto rival, Bitcoin (BTC), since Sept. 3.

Ether dropped in value against Bitcoin by almost 25% after topping out in September at 0.07955 BTC. As the top altcoin declined, it left behind a trail of lower highs and lower lows, thus forming an ascending channel.

Later, ETH/BTC broke the channel to the upside on Saturday, raising anticipations about a strong extended recovery trend. But a selloff on Sunday and the ongoing session had traders test the channel’s resistance trendline as support.

ETH price charts suggest bullish divergence

The sentiment raised Ether’s possibility to reenter the falling range as shown in the chart below.

*ETH/BTC daily price chart featuring bullish divergence. Source: TradingView*

At the same time, the formation of higher highs in ETH/BTC’s daily commodity channel index (CCI) showed hidden divergence against the pair’s downtrend. For the uninitiated, CCI is a momentum oscillator that measures an instrument’s variations from its statistical mean to spot potential reversals.

“A hidden divergence is always an indicator for a possible trend reversal,” noted Stefan Krecher, a Germany-based market strategist, adding that ETH/BTC may rebound in the coming sessions also as the pair’s daily relative strength index (RSI) remains “not overbought.”

Krecher anticipated Ether to hit its monthly pivot point around 0.071586 BTC, almost over 8% of the current levels. The upside target also coincided with the 0.618 Fib line (0.071505 BTC) of the Fibonacci retracement graph in the chart above.

On the flip side, reentering the descending channel range risked sending ETH/BTC to its range support trendline near 0.058238 BTC.

Ether price against the dollar

The bullish ETH/BTC price outlook appeared as Ether held $4,000 as solid support while rebounding over 2.6% Monday. Meanwhile, Bitcoin’s price retraced almost 3.5% after setting up a similarly strong price floor near $60,000.

As a result, ETH/BTC merely looked weaker because Bitcoin rallied strongly against the United States dollar than Ether. Nevertheless, the Ethereum token’s prospects looked bullish, as earlier reported by Cointelegraph, with the aid of an ascending triangle setup shown below.

*ETH/USD daily price chart featuring ascending triangle setup. Source: TradingView*

Ether broke out of the pattern on the daily timeframe but with little trading volume, showing weakness in the price trend.

The cryptocurrency now tests the triangle’s upper trendline as support for bullish confirmation. Should a rebound follow suit, the price could eye new record highs above $4,384, with the triangle setup’s target sitting near $6,500.

ETH supply crunch

Additionally, the supply of Ether tokens has been declining after the Ethereum network’s London hard fork. Namely, the Ethereum Improvement Proposal 1559, which went live with the update, started burning ETH that it previously paid to miners.

Data collected from WatchTheBurn shows that the Ethereum network has destroyed almost $2.25 billion worth of Ether tokens since the London hard fork’s launch.

Additionally, the Ethereum 2.0 deposit contract has attracted more than 8 million ETH, thereby removing them from circulation for at least a year.

*Total value staked in Eth2 smart contract. Source: CryptoQuant*

Moreover, regulated funds have increased their Ether holdings from 2.43 million ETH in November 2020 to 4.08 million ETH today, signifying increasing institutional demand.

PayPal logs its largest Bitcoin volume since May BTC price crash

October 22, 2021 Coin Telegraph

Bitcoin

The world's leading payment services provider processed $145.60 million worth of Bitcoin trades on the day BTC rallied to its record high of $67,000.

Bitcoin (BTC) trading volumes on global payment service provider PayPal reached $145.60 million on Oct. 20, just as the benchmark crypto rallied toward its record high near $67,000.

The latest spike in volumes came out to be the highest since the May 19 Bitcoin price crash from around $43,500 to as low as $30,000. On the day, some $304 million worth of BTC changed hands, almost double the volumes logged on Oct. 20.

*Bitcoin PayPal volumes. Source: ByBt.com*

Nonetheless, in both instances, it was unclear if the volumes were due to the increase in purchasing during the Bitcoin price rally or selloffs near the newly-achieved highs. Whatever may be the reason, the PayPal readings reflected a rise in retail activity on Oct. 20, further attested to by a spike in internet queries for the keyword “Bitcoin.”

*Bitcoin interest on internet peaked on Wednesday. Source: Google Trends*

Retail boom?

Notably, PayPal allows users to start investing in Bitcoin by putting as little as $1. As a result, the payment service firm has emerged as a viable platform for retail investors, a move seen by the industry as a cue for wider crypto adoption.

Interestingly, since PayPal's push into the crypto sector, the sum count of unique addresses holding at least $1 worth of BTC has surged from 26.83 million on Nov. 20, 2020, to 33.89 million at press time. Meanwhile, on Oct. 20, the count was 34.12 million, an all-time high.

*BTC addresses with balance greater than $1. Source: CoinMetrics, Messari*

Alexander Vasiliev, co-founder/chief customer officer of crypto payment service Mercuryo, saw PayPal's foray into the crypto industry as a sign of retail boom. He expected Bitcoin to end the fourth and final quarter of 2021 in profits as everyday traders look for safety nets against a persistently rising inflation.

"The increased buying pressure from PayPal users and its corresponding impact on the price of Bitcoin may stir a notable up-shoot this fourth quarter and as the year runs to an end," Vasiliev told Cointelegraph, adding:

"The company has millions of customers and a massive buy-up of BTC can effectively push Bitcoin to new highs [...] With the ATH at $67k, we may see a worse case price hit of $80,000 by year-end and a best-case scenario of $100,000."

PayPal has around 392 million active users worldwide, but its crypto services are available only in the United States and the United Kingdom. Meanwhile, the company is also eyeing an entry into the decentralized finance (DeFi) sector, signaling expansion outside the Bitcoin sector.

Ethereum nears its own all-time high as ETH price retakes $4K

October 20, 2021 Coin Telegraph

Ethereum nears its own all-time high as ETH price retakes K

Bitcoin

The 30-day correlation between Ether and Bitcoin remains at 0.81 above zero.

Ethereum's native token Ether (ETH) is likely to hit its own record high in the short term as ETH has broken above $4,000, a crucial resistance level.

Ethereum breaks $4,000, nearing new all-time high

ETH price rallied on Oct. 20 by over 5% to approach $4,100 on the Coinbase exchange for the first time since May 2021. The cryptocurrency's run-up above $4,000 appeared primarily in the wake of Bitcoin (BTC) breaking above $65,000 to enter price discovery.

According to data provided by Crypto Watch, the 30-day correlation between Bitcoin and Ether came out to be 0.81. That shows an 81% linear positive correlation between the two assets.

*ETH/USD versus BTC/USD daily price action. Source: TradingView*

As a result, Bitcoin's ability to enter price discovery opens up similar prospects for Ether, which still trades a few hundred dollars below its current all-time high of $4,385.

"If BTC broke to new all-time highs, I don't see why ETH wouldn't," commented Rekt Capital, an independent market analyst, adding:

"Turn ~$4,000 into support, and ETH will levitate towards $4,400 for a break to new All-Time Highs."

ETH price ascending triangle setup

ETH's latest pump boosted its year-to-date profits by almost 450%, compared to Bitcoin's 130% returns in the same period. That also raised the possibility of Ether posting better gains than Bitcoin in the coming sessions, thereby achieving levels much higher than Rekt Capital's $4,400-target.

On Wednesday, ETH price broke above the Triangle's upper trendline. Nevertheless, the move upside accompanied lower trading volume, which could see ETH retest the trendline as support in the near term.

*ETH/USD daily price chart featuring ascending triangle setup. Source: TradingView.com*

As Cointelegraph reported earlier, ETH had been painting an Ascending Triangle structure with a $6,500 upside target.

Bitcoin price eyes $65K breakout as BTC exchange reserves fall to 2018 lows

October 20, 2021 Coin Telegraph

Bitcoin

Decreasing reserves mean a decline in Bitcoin supply for selling, altcoin purchasing and margin trading.

Bitcoin’s (BTC) ongoing price rally above $64,000 has coincided with a substantial drop in its reserves across all exchanges.

According to data provided by CryptoQuant — a South Korea-based blockchain analytics service — the amount of Bitcoin held in exchanges’ wallets dropped to as low as 2.379 million BTC earlier this week, the lowest in more than three years. Currently, the reserves are around 2.38 million BTC.

*Bitcoin reserves across all exchanges. Source: CryptoQuant*

CryptoQuant noted that the declining Bitcoin reserves showed the availability of fewer BTC tokens “for selling, altcoins purchasing, and margin trading.” Additionally, that also reflected traders’ intention to “hodl” the cryptocurrency.

Demand for Bitcoin grows among whales and fishes

On the other hand, the cryptocurrency’s demand appears to have been increasing across retail and institutional traders, with the number of wallets holding more than $100 and $10 million worth of BTC reaching their record high of 16.67 million and 10,510, respectively.

*Bitcoin addresses with balance greater than $100 and $10 million. Source: Messari, Coin Metrics*

On-chain analyst Willy Woo published a report in August 2021 that discussed Bitcoin’s “supply shock” against its rising demand, concluding that the cryptocurrency’s per-token worth should be at least $55,000.

The “conservative” target remained lower than pseudonymous analyst PlanB’s $135,000 price projection by the end of 2021, based on his stock-to-flow model.

$63K✅ https://t.co/tj6SSwSzKR
— PlanB (@100trillionUSD) October 19, 2021

Meanwhile, PlanB’s Bitcoin price prediction for November 2021 sits around $98,000, above $70,000, the most preferred strike target for the options expiring on Nov. 26, as shown in the chart below.

*BTC options OI by strike price (expiry Nov. 26, 2021). Source: Bybt*

BTC price macro fundamentals

Bitcoin’s bullish on-chain fundamentals are likely to see further strength from Wall Street adoption.

On Tuesday, ProShares became the first exchange-traded product firm to launch a Bitcoin futures-based exchange-traded fund (ETF) on the New York Stock Exchange. In a milestone for Bitcoin investing opportunities, the listing opened a new road for institutional investors to gain exposure to BTC.

For instance, Fundstrat Global Advisors co-founder Tom Lee said he anticipated Bitcoin ETFs to attract at least $50 billion in the coming 12 months, reasserting his team’s year-end $100,000 price target for BTC.

Technically, Bitcoin appeared to be heading toward its record high near $65,000, now acting as a resistance level.

*BTC/USD daily price chart featuring Fibonacci retracement levels. Source: TradingView*

On the flip side, Bitcoin’s relative strength index (RSI), a momentum indicator that analyzes an asset’s overbought/oversold signals, reported the cryptocurrency price as excessively high on the daily candle chart, suggesting that a pullback is on the table.

Should a correction happen, Bitcoin’s next support target could be near $57,500, which serves as the 78.6% Fib level of the Fibonacci retracement graph, drawn between the $65,000 swing high and the $30,000 swing low.

The level also coincides with Bitcoin’s 20-day exponential moving average (the green wave in the chart above). The said level has earlier acted as strong support during Bitcoin’s uptrend.

Ethereum loses key support level as ETH price falls to two-month lows against Bitcoin

October 12, 2021 Coin Telegraph

Bitcoin

ETH/BTC dropped below its 200-day exponential moving average for the first time since March 2020, raising risks of more downside.

Ethereum’s native token, Ether (ETH), rallied by more than 15% in the first 12 days of October. But, compared to Bitcoin’s (BTC) 30% gains in the same period, the second-largest cryptocurrency is currently in a downtrend when priced in BTC.

So far into October (and the fourth quarter of 2021), the ETH/BTC exchange rate has plunged by over 12%, reaching 0.060215 BTC for the first time in more than two months on Oct. 12.

*ETH/BTC daily price chart. Source: TradingView*

The drop also pushed ETH/BTC below one of its longest-standing support zones, the 200-day exponential moving average (200-day EMA; the orange wave), as shown in the chart above. This raises the risk of more downside with 0.055304 BTC serving as the next possible target.

Bitcoin dominance rises on ETF hopes

More evidence for ETH/BTC’s weakness came from Bitcoin’s rising dominance in the crypto market.

In detail, the Bitcoin Dominance Index, which measures the flagship cryptocurrency’s capitalization against the rest of the crypto market, surged from 42.39% on Oct. 1 to 46.64% on Oct. 12. On the other hand, Ether’s dominance dropped from 18.15% to 17.57% in the same period.

*Bitcoin dominance index daily chart. Source: TradingView*

That shows that more capital rotated into the Bitcoin market than altcoins so far into October.

The rising Bitcoin dominance coincided with expectations that the United States Securities and Exchange Commission could approve four Bitcoin-based exchange-traded funds (ETF) in a matter of weeks. The applicants are Global X Bitcoin Trust, Valkyrie XBTO Bitcoin Futures Fund, WisdomTree Bitcoin Trust, and Kryptoin Bitcoin ETF.

SEC Chair Gary Gensler hinted at an optimistic outcome for Bitcoin ETFs despite the SEC rejecting similar applications for eight years in a row. Gensler noted that this time, however, the Bitcoin ETF applicants filed under the Investment Company Act of 1940, which offers higher investor protection.

Earlier this week, two “light” Bitcoin ETFs started trading in the U.S., named Invesco Alerian Galaxy Crypto Economy ETF (SATO) and Invesco Alerian Galaxy Blockchain Users and Decentralized Commerce ETF (BLKC). However, the funds invest 80% of their assets in crypto-related companies, not Bitcoin itself.

*SATO ETF 15-minute price chart. Source: TradingView*

The SEC also approved a third crypto equity ETF. Dubbed the Volt Crypto Industry Revolution and Tech ETF (BTCR), the fund will gain exposure “in entities that hold a majority of their net assets in bitcoin or derive a majority of their earnings from bitcoin mining, lending or transacting.”

Bitcoin to go “insane?”

James Seyffart, an ETF analyst with Bloomberg Intelligence, said the news would be “very bullish” for Bitcoin. Similarly, independent market analyst Lark Davis also predicts “insane” market reactions should the SEC approve a Bitcoin ETF having exposure to actual BTC.

I don't think people are fully prepared for how insane the markets will go once we get a #bitcoin ETF approved!
— Lark Davis (@TheCryptoLark) October 8, 2021

So, it appears the speculation over Bitcoin ETF approvals raised traders’ appetite for the top cryptocurrency in recent days, with BTC outperforming its top rivals, including Ether.

Nonetheless, Ethereum boasts a strong decentralized application ecosystem and remains the key force behind the booming decentralized finance and nonfungible token sectors.

David Gokhshtein, founder of Gokhshtein Media and PAC Global, noted that Ethereum’s healthy network effect could send Ether to $10,000 by the end of this year. Meanwhile, as Cointelegraph covered, an ongoing supply crunch in the Ether market should remain a major talking point for bulls moving forward.

Bitcoin’s $100K price target returns as BTC price breaks out of bull pennant

October 11, 2021 Coin Telegraph

<div>Bitcoin's 0K price target returns as BTC price breaks out of bull pennant</div>

000

The bullish analogy appears as Bitcoin reserves across all the crypto exchanges fall to their lowest in the previous 12 months, suggesting holding sentiment among traders.

Bitcoin (BTC) looks poised to pursue a run-up towards $100,000 as its price breaks out of a classic bullish structure.

Dubbed as Bull Pennant, the setup represents a price consolidation period with converging trendlines that form after a strong move higher. It ultimately prompts the price to break out in the direction of its previous trend to a level typically at length higher by as much as the size of the initial large move.

On Bitcoin weekly charts, the cryptocurrency appeared to have been trending inside a similar consolidation structure, with its price fluctuating inside a Triangle-like structure following a strong move higher (Flagpole).

*BTC/USD weekly price chart featuring Bull Pennant setup. Source: TradingView.com*

Last week, Bitcoin broke above the structure's upper trendline as it rose by 13.5% with rising trading volumes to boot. As a result, the cryptocurrency's breakout move indicated its potential to rise by as much as the size of its previous trend (nearly $50,000).

Measuring from the point of breakout (~$48,200), the Bull Pennant's upside target thereby comes out to be another $50,000 higher, i.e., almost $100,000.

Other predictions

The technical setup projected Bitcoin at $100,000 no longer after many analysts envisioned the cryptocurrency at the same, six-digital valuation.

A team of researchers at Standard Chartered, headed by its global head of emerging market currency research, Geoffrey Kendrick, predicted BTC to hit $100,000 by early next year. They cited Bitcoin's potential to become "the dominant peer-to-peer payment method for the global unbanked" behind their bullish prediction.

David Gokhshtein, the founder of Gokhshtein Media and PAC Global, also imagined Bitcoin above $100,000 before the end of 2021. The executive based his bullish outlook on the amount of available fiat liquidity in the market, which, according to him, has prompted leading Wall Street players to purchase Bitcoin.

"Not everybody's going to come out publicly and tell you that they're buying bitcoin, but they are," Gokhshtein told Business Insider.

"There's too much money in the market. Way too much money. Institutions did not come in here to play for five minutes."

His statements appeared after George Soros' investment firm revealed at a Bloomberg event that it owns Bitcoin, sending the cryptocurrency spiking. That soon followed up with JPMorgan & Chase's latest report that showed institutional investors' preference for Bitcoin over Gold as an inflation hedge.

In an earlier study published in May, the banking giant projected Bitcoin to reach $140,000 in the long term.

Holding sentiment on rise

On-chain indicators highlighted a rise in holding sentiment among Bitcoin traders.

In detail, the Bitcoin reserves held across all crypto exchanges recently dropped to their lowest levels in a year, as per data provided by blockchain analytics firm CryptoQuant. The decline illustrated traders' intention to hold their Bitcoin tokens close than trading them for other fiat/digital assets.

*BTC reserves across all exchanges. Source: TradingView.com*

Therefore, declining Bitcoin balances on exchanges typically follow up with rise in the BTC price.

CME Bitcoin derivative traders had ‘paper hands’ as BTC broke $55K — Report

October 7, 2021 Coin Telegraph

Bitcoin

Traders wound up their long Bitcoin derivatives contracts ahead of the October price rally, ignoring solid on-chain fundamentals.

Bitcoin (BTC) derivatives traders on the Chicago Mercantile Exchange (CME) missed out on incredible profits as BTC’s spot price smashed through $55,000 this week.

Retail investors reduced their long exposure across the Bitcoin futures and options markets in late September, according to data shared by Ecoinometrics. The amount of open short positions also climbed, indicating that derivative traders anticipated Bitcoin’s price to drop, as shown in the chart below.

*CME Bitcoin derivatives — retail traders. Source: CFTC “Commitments of Traders” report, Ecoinometrics*

The data was taken on Sept. 28, when BTC price had fallen below $41,000 on Coinbase — down almost 23% from its month-to-date high near $52,950. The drop surfaced in the aftermath of China’s decision to ban all kinds of crypto transactions.

“Most likely, this dip is due to a mix of traders not rolling their long positions to the October contract and some outright liquidating when BTC looked like it was going to drop below $40k last week,” said Nick, an analyst at Ecoinometrics.

“Regardless, the overall picture is that the futures traders lack conviction.”

“That’s paper hands 101,” the analyst noted.

Smart money

Institutional investors in the CME Bitcoin futures market also followed retail sentiment as they reduced their long exposure in the market. But, on the other hand, their short positions climbed.

With CME options traders convinced that Bitcoin price would drop, the number of puts — an implicitly bearish bet on Bitcoin’s price — turned out to be almost twice the size of the calls, or bets on potential Bitcoin price gains.

*CME Bitcoin options — puts vs. calls open interest. Source: Ecoinometrics*

Traders’ position distribution made $40,000 the most sought-after strike price target.

On the other hand, some options traders bet that the spot Bitcoin price would hit $60,000 by the end of October. Additionally, analyst Crypto Hedger highlighted that Bitcoin options expiring on Nov. 26 show bulls’ sentiment skewed toward the $80,000-strike target.

*Buy/sell volume in the last 24 hours for Nov. 26 Bitcoin options contract. Source: Laevitas, Crypto Hedger*

“At this current growth pace, Bitcoin has formed very strong support at the $50,000 price point, and short-term traders may also need to watch out for the key resistance level around $56,000,” said Konstantin Anissimov, executive director of CEX.IO, adding:

“A break below or above these levels can stir another cataclysmic price reversal or a massive run toward $60,000 in Q4.”

Bitcoin supply squeeze in play

On-chain data shared by Ecoinometrics also showed a higher level of Bitcoin withdrawals from all the crypto exchanges.

In detail, Bitcoin’s 30-day net exchange flow has been rising since July 2020, as noted in the color-coded chart below, with blue and red indicating extreme outflow and inflow, respectively.

*Bitcoin rolling net exchange flow. Source: Coinmetrics*

Ecoinometrics noted that the amount of Bitcoin currently leaving exchanges is higher than it was in the previous four-year halving cycles.

*Bitcoin rolling net exchange inflow (second halving vs. third). Source: Coinmetrics*

Meanwhile, traders see the reduction in Bitcoin’s supply on exchanges, with increasing “hodling” activity, as further catalysts for a liquidity crisis and more price upside.

“Back then there were indeed periods of net outflows but in terms of size they look much less dramatic than what we have right now,” Ecoinometrics highlighted, adding:

“That’s another sign that we are on course for a liquidity crisis which could drive Bitcoin’s value much higher than it is right now.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, and you should conduct your own research when making a decision.

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