This market trend shows that the price of Bitcoin is ready for the next step

[ad_1]

The cryptocurrency exchange balance indicates that the price of bitcoin is poised for extreme strength in the coming weeks.

The following is taken from a recent edition of Deep Dive, Bitcoin Magazine’s high-end market newsletter. To be among the first to receive this and other on-chain bitcoin market analysis straight to your inbox, subscribe now.

Bitcoin seems ready for its next step.

An ongoing battle between the bulls and the bears is currently underway for the 200-day moving average of the price of bitcoin. The 200-day moving average is often viewed by traders and market analysts as a key indicator of a given asset’s momentum.

However, beware, as one of the most significant trends in the bitcoin market over the past two years portends extreme bitcoin price strength in the coming weeks / months.

The bitcoin exchange balance, often covered in The Daily Dive, continues the dominant trend it has been following since the start of 2020, the massive accumulation and withdrawal of coins from exchanges.

In fact, there have only been two other times that more bitcoin has been withdrawn from trading on a net basis in the history of Bitcoin. The first followed directly on the COVID-19-induced derivative explosion, which sent global markets tumbling down and the price of bitcoin plummeted by nearly 50% in a single day.

The second opportunity came in November of last year, following the announcement of the adoption of an enterprise bitcoin standard by business intelligence firm MicroStrategy, as well as a purchase of $ 50 million by fintech company Square.

When looking at the percentage of bitcoin supply in circulation not on exchanges and the price of bitcoin, there has been an almost one-to-one correlation over the past 18 months, with an occasional price lag.

We saw this happen in the summer of 2020 as bitcoin was withdrawn from trading on a net basis at a feverish pace as the price lay dormant until November, when bitcoin began its violent uptrend. .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

[ad_2]