Despite global political instability and a shaky economic outlook, data from the Bitcoin network suggests the current upward trend isn’t finished.
Instead of showing signs of slowing down, indicators that monitor how investors are acting reveal that Bitcoin’s price could still rise significantly. This article explains how this is possible.
Large Investors Accumulate, Smaller Investors Sell
According to a recent report from CryptoQuant analyst IT Tech, who uses a pseudonym, major Bitcoin holders – typically wealthy individuals, institutions, and investment funds – have been steadily increasing their Bitcoin holdings over the past year. This contrasts with the trend among smaller, retail investors, who are continuing to sell off their coins.
IT Tech’s analysis shows that the number of Bitcoins held by retail investors (in wallets containing less than 1 BTC) has decreased in the last year. These wallets currently hold 1.69 million BTC, a year-over-year reduction of 54,500 BTC, with an average daily outflow of about 220 BTC.
Conversely, larger holders possessing 1,000 BTC or more are actively buying more Bitcoin. This investor group now controls 16.57 million BTC, which is 507,700 BTC more than they held a year ago.
Their average daily inflow is 1,460 BTC, underscoring the demand from institutional participants, even amidst recent price fluctuations. Furthermore, this group demonstrates a strong positive link with Bitcoin’s price, registering at +0.86. This indicates that institutional purchasing grows stronger as prices increase.
Moreover, the report emphasized that the current Bitcoin market cycle isn’t driven by retail investors experiencing “fear of missing out” (FOMO). Unlike previous peaks, where smaller investors rushed into the market, this cycle is marked by continued selling pressure from these individuals. IT Tech stated that this suggests “the bull run still has room to grow.”
Can Bitcoin Overcome the $109,000 Barrier?
Since the announcement of a potential ceasefire between Israel and Iran on Monday, Bitcoin’s price has been gradually increasing. Trading at $107,698 at the time of writing, its value has gone up by 2% since the news emerged.
Additionally, a rising Relative Strength Index (RSI) confirms the buying activity supporting this upward movement. Currently, the RSI is at 57.15 and climbing, signaling a consistent rise in demand for the leading cryptocurrency.
The RSI is an indicator used to gauge whether an asset is overbought or oversold. It operates on a scale from 0 to 100. Readings above 70 typically mean an asset is overbought and likely to experience a price decrease, while readings below 30 suggest it is oversold and could see a price rebound.
With the RSI at 57.15 and increasing, growing demand for Bitcoin could push its price beyond the $109,267 resistance level, potentially leading to a move towards its all-time high of $111,968.
However, if demand weakens, Bitcoin’s price could fall back to $106,295. Failure to maintain support at this level could result in a further decline toward $103,952.
Disclaimer
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