Bitcoin’s price movement has done little lately for investors to gain any insight into the medium-term outlook. BTC trades right between the lower and upper bounds of its long-term trading range between $ 10,200 and $ 11,200.
The lack of momentum has hit investor sentiment hard, and many investors and analysts have expected the consolidation to end with a sharp decline.
Despite this perceived bear market, one analyst stated that fundamentally the cryptocurrency couldn’t be stronger, adding that he believed price was a trailing indicator of underlying strength.
He even goes so far as to note that on-chain metrics suggest that BTC is completely in “moon mode” while its price remains slightly bearish.
In this respect, he believes that a clear upward trend is imminent and that the market will become very aware of its strength in 2021.
Bitcoin’s balance on exchanges goes down; a “Very Macro Bullish” sign
Bitcoin’s dwindling volatility may be due to a confluence of traders less interested in using platforms like BitMEX after the CFTC cracked down on unregulated derivatives platforms and the lack of spot BTC on the exchanges.
These factors have had a noticeable impact on the volatility of the cryptocurrency, which has dropped sharply in recent weeks.
Willy Woo – a well-known on-chain analyst – stated that the massive decline in the BTC balance on the exchanges was a “very macro-bullish” sign, suggesting that an uptrend could be imminent.
“When coins fall on cash exchanges, it is a sign that new buyers are coming to scoop coins from the markets and bring them to the HODL cold store. We’re seeing new HODLers.” Very macro-bullish. ”
Image Courtesy of Willy Woo. Data via Woonomic.
2021 could be the year BTC price hits its fundamental strength
Woo further noted in a separate tweet that it is now one of the few times that he has ever seen such a noticeable divergence between the price of Bitcoin and its fundamental strength.
“This is one of the few times in my Bitcoin career where the basics (on-chain data and infrastructure player metrics) are in moon mode, but the market is not woken up by it. They will be until 2021. This is an opportunity I haven’t seen since mid-2016. ”
Due to Bitcoin’s low stock market equilibrium and massive buying pressure from new market participants, this fundamental strength could significantly increase the price.
Featured image from Unsplash.