Volatility is back in the market as bitcoin price continues to struggle to attain the $12,000 level. Much like last weekend, this week started on a positive note with the digital asset surging past $12k only to fall $500 immediately after, only to start testing that high again.
On a technical basis, this bullish development puts bitcoin’s 14-day Relative Strength Index (RSI) above 70, which if exceeds this level would be considered overbought. Matt Maley, chief market strategist at Miller Tabak + Co. said,
“It looks like it wants to test its 2019 highs of $13,800 before it sees a meaningful correction to work off this overbought condition.”
But for others, the main milestone bitcoin needs to beat first is the all-time high $20,000 from where it’s clear skies for the digital asset. Mati Greenspan, founder of Quantum Economics said,
“The level of $10,000 has represented a strong psychological barrier for Bitcoin for the last few years. Now that barrier is broken and there are no major levels of resistance on the graph until the all-time high at $20,000.”
Since starting this quarter, Bitcoin is up nearly 28% and more than 60% YTD. According to analyst Rekt Capital, the Bitcoin bull market is “confirmed.” He said,
“Still on track for a strong 12M close above $14,300 by the end of 2020. A 12M close above $14,300 and BTC would be well-positioned to reach a new All Time High in 2021.”
These gains have more than 93.44% of the bitcoin addresses, 28.88 million addresses, in profit, as per IntoTheBlock.
As of today, 93.5% of the Bitcoin supply is in profit. Main bull phase beginning. https://t.co/EoY7XaPX9W
— Willy Woo (@woonomic) August 11, 2020
All the while, the hodling trend is holding strong as the number of bitcoin hodlers has increased by about 4 million in the past year.
A total of 20.47 million addresses were holding 11.51 million Bitcoin for over a year now, as of August 9, as per IntoTheBlock.
Adding further bullishness to this is the miner flows to the cryptocurrency exchanges, which has been on a decline since May.
Miners are some of the biggest whales in the market,” noted trader Cole Garner. “When miners send BTC to exchanges, they're selling — a leading indicator of local tops.”
Moreover, the upward trend of bitcoin price has miners turning profitable with bitcoin production cost at around $7,250. Last month, miners actually saw a 7% increase in their revenue thanks to higher network fees and an increase in transaction volume. Average daily fees jumped 300% from the end of last month.
Bitcoin mining is once again profitable. pic.twitter.com/FTAinTKzcP
— Charles Edwards (@caprioleio) August 10, 2020
A spike in BTC price also has miner manufacturer Canaan gaining 34% in July while Riot Blockchain recorded 10% gains.
However, biggest miner manufacturer Bitmain delayed shipments by three months, pushing the delivery of orders due in June and July to September and October, due to internal fight for control between the company's co-founders that could make things hard for the affected miners.