According to On-chain analyst Willy Woo, Bitcoin could potentially hit $200,000 in 2021 as investors are more confident than they have ever been. Long time investors are on the rise as many buy Bitcoin for speculative purposes as the number of those hodling the coin is on the rise.
The main reasons why Bitcoin’s rally is only getting better is that long time hodlers are still holding onto their funds as compared to previous rallies. Another reason is that the amount of BTC in exchanges is declining; hence the selling demand is low.
Bitcoin has been very bullish in most of 2020, which suggests re-accumulation. This has decreased the pressure of selling BTC, which has made the rally more stable without much corrections, which was expected at 30% – 40% as in 2017.
That suggests we are in a Bitcoin re-accumulation phase as it coincides with the spot market inventory depletion, which is double stronger and deeper than the previous cycle.
The declining Bitcoin reserve in exchanges shows that those who have BTC are not willing to sell them; instead, they prefer to hold them stronger. As of 2017, Bitcoin investors made $0.25, while in 2020, the profit increased to $0.35. That shows that investors are optimistic of an even better return come 2021.
According to the trends predicted by on-chain Analysts, bitcoin has the potential of hitting $200,000 by December 2021. That is just a conservative figure meaning it could increase to more than that.
From reports done, the Bitcoin HODL wave is also on the same agreement that HODLers are still not willing to part with their Bitcoins despite the high prices in the market. This is contrary to the 2017-2018 bull cycle that saw high-net-worth individuals and whales sell their coins.
It looks like we are in an extended Bitcoin Bull run. According to Woo, we are like in an extended bull run from March 2020.
This is contrary to the price fall that happened on March 12 that shocked the market. The price has recovered since and experienced a straight nine-month recovery.
In the short-term, the recovery in the value of the US dollar and liquidation in the gold market will affect Bitcoin’s performance. It is likely to cause a pullback that will affect the coin’s momentum.
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