Bitcoin (BTC) price has risen below this level after almost 21 days, with the exception of the “Elon Musk” rally last week. There are four main factors that coincided with the rebound in BTC price above this key level, which could result in Bitcoin seeing another spike at $ 42,000.
These factors include the neutral RSI (Relative Strength Index) indicator, decreasing mine discharge, reflux of net flow into negative, and whale accumulation.
Whale accumulation coincides with a negative exchange network flow
According to the pseudonymous cryptocurrency trader “Bitcoin Jack”, Bitcoin demonstrates a technical formation “Cup and Handle”.
The technical formation usually indicates an upward trend reversal, which is almost confirmed when Bitcoin executes a short-term breakout.
The trader also highlighted the negative stock exchange net flow from exchanges showing signs of a bitcoin accumulation phase. Citing data from CryptoQuant, the trader wrote:
“Bitcoin looks like a Cup & Handle – negative AC net flow supports the New ATH accumulation thesis around the corner for $ BTC.”
The negative net flow on the exchanges is an important metric as it shows that Bitcoin is leaving the exchanges.
Wealthy investors prefer to remove Bitcoin from exchanges after accumulating it for security and self-governance reasons. If BTC is moved to an unprotected wallet, nobody but the owner of the private keys will have access to it.
In addition, analysts at Glassnode noted that the number of whales holding Bitcoin has increased significantly so far this year. The combination of the negative net flow and the rise in whales shows that bitcoin accumulation remains high. They write:
“The number of #bitcoin whales (companies with a value of ≥ 1,000 BTC) has increased astonishingly. Since the beginning of the year, more than 200 new whale units have emerged on the network – data that supports the event that institutions arrive. “
Bitcoin’s RSI is neutral
Bitcoin’s RSI over many periods has returned to around 50, which is neutral. The RSI is an indicator that measures whether an asset is overbought or oversold.
When Bitcoin’s RSI exceeds 75 it is considered overbought. If it drops below 30 it is considered oversold.
Although Bitcoin stays close to the overbought area in the daily and weekly timeframes, which are high timeframes, the RSI on most low timeframe charts is between 45 and 60. This suggests that Bitcoin has upside potential in the short term .
The outflow of miners is decreasing
Bitcoin miners are one of the main sources of selling pressure on BTC as they present unmatched selling pressure.
When miners start selling the BTC they mine on exchanges, it can put significant pressure on Bitcoin’s short-term price cycle.
According to data from CryptoQuant, the Miners’ Position Index (MPI) has fallen. At least for the foreseeable future, this means that miners’ selling pressure should be low.