Bitcoin’s current price activity is not reflective of its intrinsic value. Cryptocurrencies, and Bitcoin as the leading digital currency, are becoming “more and more important in the global economy.” Sentiment towards cryptocurrency has hindered its predicted progression to over $100,000 as the discussion around crypto diverts attention from its true value. Bitcoin is trading between the $30k – $35K range, but data shows that the situation is set to change, as further indicators arise pointing to a bullish drive.
Data Shows the Right Path Forward
Glassnode and crypto analysts are predicting a possible price spike for bitcoin. Additionally, Grayscale announced that its Grayscale Bitcoin Trust (GBTC), which is the only trusted public trading vehicle for BTC trading, will be unlocking 16,240 BTC. As QCP Capital asserts, bitcoin’s price will not be heavily impacted despite the potential liquidation undergone by institutional traders.
The BTC supply shock ratio displays the number of users that are selling and holding Bitcoin. According to the latest data from Glassnode, investors who are playing a long-term game are absorbing the existing sell-off. As reported by a MarketWatch article, Bitcoin’s short-term progress is still bearish, but the end result is likely to be highly bullish as ETFs are gathering more attention from institutional investors.
Reduced volatility indicates that high capital funds are entering the market, and retail, which is considered highly emotional, is watching on the sidelines. Bitcoin’s sideways price action has set up the potential for upward momentum as lower volatility usually catalyzes bullish divergence. Mancini of “Trade the Chain” compared the current volatility to July 2020, which resulted in “explosive bullish price action.”
While there are indicators of a positive upswing, every variable and scenario must first be considered. Despite Bitcoin’s gold-like attributes, the token and its stability are comparable to the penny stock. In addition, pushback from regulators and increased media scrutiny has hindered Bitcoin’s ability to reach its full potential.
Institutions Are Pouring in
The digital-gold narrative of Bitcoin is well-founded and backed by many traders. Nick Mancini emphasized that crypto sentiment fell to “single-digit levels” when the Chinese mining exodus first began. However, as market opinion is reflected in the current price action, trader behavior is shifting in these uncertain times.
Bitcoin’s progression past $100,000 is still on the cards, and as Clem Chambers, CEO of ADVFN, mused, bulls are just waiting for a new accumulation period. Bitcoin’s short-term future is bearish, with possible upswings along the way. Still, investors like Scott Minerd argue that Bitcoin’s true valuation is closer to $400,000, and speculative bubbles occur when price action is not heavily backed by institutional interest.
Institutional traders such as George Soros and other high-capital investors decide to invest when price activity is in limbo. As he once stated, investors look for trends early and act on them. Following this theme, Bitcoin’s long-term trend is positive, nevertheless, investors have the ability to capitalize on the current downtrend.
On The Flipside
EMAIL NEWSLETTER
Join to get the flipside of crypto
Upgrade your inbox and get our DailyCoin editors’ picks 1x a week delivered straight to your inbox.
Error: Contact form not found.
You can always unsubscribe with just 1 click.
Continue reading on DailyCoin
Source: Cryptocurrency - investing.com
