After declining at $ 15,960 on November 6, Bitcoin (BTC) defended the $ 15,000 support level with strength. Based on four data points in the chain, analysts believe the rally could go beyond $ 16,000.
Analysts have identified lower Bitcoin exchange reserves, an unmoving supply, a surge in “stronger hands” and unrealized gains as factors in the rally to continue.
The number of BTC held on exchanges is falling
Recently, Delphi Digital, an independent cryptocurrency research and advisory firm, released a report on the outlook for the Bitcoin market.
Paul Burlage, an analyst at Delphi, said that on-chain metrics are generally strong momentum for Bitcoin.
Since February 11th, Bitcoin foreign exchange reserves have dropped from 2.96 million to 2.41 million. In US dollars, a drop of 550,000 BTC equates to $ 6.36 billion.
The decline in Bitcoin foreign exchange reserves is an optimistic event as fewer sellers are depositing BTC on exchanges. Burlage said:
“On February 11, 2020, the BTC value on the stock exchanges reached its all-time high of ~ 2.96 million euros. At the time of writing, BTC is valued at ~ $ 2.41 million on the exchanges. This current trend shows a divergence between BTC stock and price, suggesting a more sustained uptrend for BTC-USD. “
Unmoved BTC supply peaks
While fewer sellers have transferred their funds to exchanges, the unmoved supply of BTC remains high.
On September 9, Burlage stated that the percentage of unmoved supply for BTC had hit an all-time high of 63.5%. Since then it has fallen slightly to 62%, but given the significantly higher price, it is a positive metric. He explained:
“We saw a slight decrease in the percentage of unmoved supply over the past week last year. After reaching an all-time high of around 63.5% unmoved supply on September 9, we are currently at around 62.0%. “
This shows that despite the recent rally, investors are increasing the “HODLing” -BTC and are not yet taking big profits.
No clear signs of a top yet
The number of “weak hands” or speculative buyers has declined noticeably in recent weeks, while the stronger hands have been strengthened.
The dropout of short-term buyers and the entry of long-term “HODLers” suggest that Bitcoin could see a longer rally.
This trend coincides with Bitcoin’s resilience above $ 15,000 and shows that the once high level of resistance is becoming almost an area of support. Burlage notes:
“While local highs for ‘weak hands’ are trending down, we cannot confirm that the recent surge in the speculative base has spiked. Even so, the larger trend suggests that stronger hands are more likely to populate short-term age groups than speculators. “
Unrealized Bitcoin gains signal that the rally could continue
In July 2019, the price of Bitcoin hit a high of around $ 14,000. At that point, Glassnode Technical Director Rafael Schultze-Kraft said that Bitcoin’s relative unrealized gain reached 0.64.
Although the price of Bitcoin is over $ 15,000, the relative unrealized gain is currently at 0.53. This shows that BTC has the potential to see a broader rally before a major pullback.