BTC Price Will Find the Bottom in 2021, While Bitcoin Network Regains Strength
This week, bitcoin experienced volatility after going through a quick rise and then fall. The world’s leading digital asset breached $10,000 level earlier this week but failed to hold this and dropped shortly after.
These ups and downs formed a “Bart Simpson” pattern, resembling the cartoon character’s hairstyle, which traces an upward swing with even some spikes leading to sideways trading followed by a swift drop. The pattern is noticed many times during volatile trading stretches.
This pattern emerges particularly when there are significant short-term changes in demand, increasing use of derivatives, and shift in its correlation with traditional assets, according to Marc Grens, co-founder of DigitalMint. He said,
“As a result of substantial short-term shifts and increases in liquidity, this pattern will continue to rear its Bart Simpson head several more times during the current global recession and potential recovery following the lockdown orders.”
According to Crypto Whale, these patterns are “very profitable” for cryptocurrency exchanges. Bitcoin’s move above $10k saw over $250 million shorts liquidated and then the dump saw this level of longs liquidated.
“This is why leverage trading isn't recommended for beginner investors. The exchanges profit A LOT from greed/fear,” he said.
Where to Next?
Since its drop down, bitcoin has been gradually making its way upwards and is currently trading above $9,600 with 1.30% gains. The digital currency is up 31.65% in 2020 so far.
Some traders are expecting the next move to be a bullish one on the basis of the On Balance Volume indicator (OBV) which measures buying and selling pressure.
— IncomeSharks (@IncomeSharks) June 4, 2020
Others are still bearish on bitcoin.
— TraderArjun (@arjunkkohli) June 4, 2020
The bull run, as per the quantum analysis model by Crypto Whale, will start in 2022 after finding its bottom next year. It took the trader 6 years to create this model of which he will be releasing a 27-page document later this month.
Introducing the (FF) Whale Model! 🐋
This quantum analysis model uses dozens of statistical modeling, measurement, and research to predict #Bitcoin's future price.
It forecasts the bottom in 2021, then the start of a bull run in 2022.
— Whale 🐋 (@CryptoWhale) June 2, 2020
The price of bitcoin is still struggling to make a strong bullish move but the network is making progress with the mempool starting to fill up transactions once again after the halving.
Over the past few weeks, the bitcoin mempool grew and peaked at about 80k unconfirmed transactions. This was the result of the drop in hash rate and the subsequent rise of the average interval between blocks.
Post halving, there was a longer interval between blocks which means fewer blocks mined per day which in turn resulted in fewer transactions confirming causing the mempool to fill up.
Now the network is shedding the effects of the halving but miners that play an essential role in the bitcoin ecosystem have slowed down their BTC sales compared to prior to the event.
However, during bitcoin’s recent spike to $10,000, the inflows on major crypto exchanges like BitMEX, Binance, and Huobi increased, as per Glassnode.
As we reported, an unknown miner sold some of his BTC at $10k, also the past week, bitcoin miners sold more BTC than they generated, which has been cut down into half to 900 BTC per day post halving.