With Bitcoin price having incredibly gone up by 37 percent and just over three months to its supply cut in half, there is good reason why a lot of financial analysts are bullish on Bitcoin.
With Bitcoin price having a new $9,000 support, a potential new upwards trend has started which can only give a bullish conclusion. While the current resistance at $9,500 is massive, analysts are confident that a $10,000 price is imminent despite short-term bearish divergence.
We can all agree though that the $10, 000 psychological barrier is what we are all eyeing and hopefully it forms a new support that will see Bitcoin hit the prophesied $12, 000 during the halving period.
While the 2020 uptrend has no doubt put some more money into the pockets of investors, it also now appears to have fundamentally altered the Bitcoin market structure, possibly signaling the recent bear market reversal’s imminence.
Since July 2019, Bitcoin deposit on crypto exchanges has significantly declined which shows investor holding onto Bitcoin rather than selling. This is usually a accurate indicator of the market sentiment where downtrends experience selling pressure while upsurges see investor funds withdrawals on exchanges, which is the case in the current market.
— glassnode (@glassnode) January 29, 2020
In the last 6 months, bitcoin deposits have dropped by half from 55, 000 back in July 2019 to a low of 25, 000 in January 2020. Interestingly, the fall in deposits correlated with a rise in bitcoin price at around $14, 000.
The fall in deposits and the increase in price are attributable to the upcoming block reward halving in May 2020 as indicated by the market reluctance to sell in the short to medium term as the halving is expected to impact on bitcoin price.
There is no doubt that the coming block reward halving will have a strong effect on the price of bitcoin at least in the medium-term which indicates less incentive to sell in the current landscape.
It’s important to note that the $9, 500 price has acted as a multi-year resistance level and an easy climb above it is unlikely to happen without a firm seller reaction. Analysts seem confident that a pullback is imminent after a near 50 percent rally since December 2019 making them cautious about the short-term bitcoin price.
For now, Bitcoin faces this key resistance level before we can see $10, 000 after which, it will be anyone’s guess where the largest crypto by market cap could go next.
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