According to on-chain analyst Willy Woo, the price of Bitcoin (BTC) could hit a “conservative” target of $ 200,000 in 2021. The forecast is based on the fact that longtime investors appear more confident on the recent rally.
There are two key data points that suggest that Bitcoin’s ongoing rally could explode higher. First, “HODLers” or long-time BTC holders don’t move their funds any longer than they did at previous rallies. Second, BTC held on exchanges continues to decline, reducing selling pressure.
A bullish bitcoin re-accumulation phase is taking place
Bitcoin’s re-accumulation has remained a consistently bullish trend through 2020. It has steadily reduced selling pressure on BTC and enabled a more stable rally without major corrections of 30% to 40%, as was often the case in 2017.
Woo noted that he is bullish for 2021 as Bitcoin’s rebuilding phase means the amount of BTC that could be sold is much less compared to the previous bull cycle. He said:
“I’ve never been so optimistic in 2021. This phase of renewed accumulation coincides with an approximately twice longer and deeper depletion of the spot market stocks than in the last cycle. It will send BTC. “
On the declining Bitcoin reserve on the stock exchanges, Woo noted that HODLers “hold stronger”. In 2017, the profit per capital invested in Bitcoin was around $ 0.25. That number rose to $ 0.35 in 2020, meaning more investors are expecting bigger profits going forward.
Based on the combination of the two bullish on-chain trends, Woo said Bitcoin could reach a “conservative price” of $ 200,000 by the end of 2021. He explained:
“My top model, which is proposing USD 200,000 per BTC by the end of 2021, looks conservative, USD 300,000 is out of the question. The current market paid an average of $ 7,456 for their coins. You are all geniuses. “
As reported in May, the Bitcoin HODL wave data also supports the argument that HODLers from the 2017-2018 bull cycle are not selling at these relatively high prices, including wealthy individuals or “whales.”
However, this data also suggests that some previous HODLers took profits three to seven years ago after a lengthy BTC rally, increasing the chances of a short-term correction.
Woo called for a massive BTC rally in March 2020
As Cointelegraph previously reported, Woo has been calling for an expanded Bitcoin bull run since March 2020.
On March 4, Woo announced Max Keizer, host of RT’s Keizer Report, that Bitcoin could hit $ 135,000 in the bull run. He said then:
“They could get up to 35 times the cumulative average of the price – and that actually picked every single top in Bitcoin’s decade history – which is currently over $ 50,000, but it keeps rising the longer it goes.”
Although the price of Bitcoin fell below $ 4,000 on March 12 in a Black Thursday crash that shocked the market, it has since rebounded rapidly.
The bull trend that had to kick in in March before the crash now appears to be in full swing following BTC’s strong nine-month recovery.
In the short term, however, analysts believe that the likelihood of a recovery in the US dollar could result in a small decline in Bitcoin. After the largest three-week liquidation in the gold market, analysts also see a recovery in the precious metal that could bring BTC’s momentum to a halt in the short term.