As a seasoned crypto investor with a decade of experience under my belt, I find myself increasingly optimistic about Bitcoin’s trajectory based on the insights presented in this analysis. Having lived through two previous bull cycles, I can attest to the wisdom in the old saying, “The more things change, the more they stay the same.
The indicators for Bitcoin’s worth imply that the bull market is likely to continue and may potentially reach even greater heights. There’s no evidence yet of the overvaluation usually seen at price peaks, leading some analysts to predict a possible target of $146,000 in this particular cycle.
According to a report published on November 27, the research firm CryptoQuant indicates that the value of Bitcoin (BTC) held by new investors has yet to reach levels seen during previous market cycles. At present, the holdings of newly invested Bitcoin account for only about 50% of the total Bitcoin investment, whereas in previous peak markets, such as 2017 and 2021, it exceeded 90% and 80%, respectively.
These levels could be explained by relatively low Bitcoin buying activity among retail investors in the past few weeks. According to the analysis, high retail activity is usually a sign of market cycle peaks. Since October, retail investors have decreased their holdings by about 41,000 Bitcoins, while larger investors have substantially increased their holdings, acquiring approximately 130,000 Bitcoins.
“Previous bull cycles have ended when retail investors were buying aggressively, which is not the case today.”
The change implies a possible evolution in market trends, as institutional and major investors seem to be spearheading the accumulation phase. In November, it was primarily exchange-traded fund (ETF) investors who bought Bitcoin, with weekly purchases peaking at an unprecedented $3.1 billion during the week ending Nov. 22 – a time when the cryptocurrency price hit its all-time high of $99,655.50.
On November 26th, the Bitcoin price dropped to approximately $91,000 and was unable to surpass the $100,000 barrier, known as resistance. Some financial experts believe that Bitcoin might experience a 30% decrease in value before reaching the six-digit mark for the first time.
According to the recent analysis, the potential peak value for Bitcoin is estimated at around $146,000, a level that has historically functioned as a ceiling during past market cycles, such as the one seen in April-May 2021. Remarkably, the Profit and Loss (P&L) Index hasn’t yet signaled overvaluation during this cycle, suggesting there may still be room for Bitcoin’s price to rise further.
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2024-11-27 23:45