The world of Bitcoin continues to reveal exciting developments, particularly this week, breaking significant resistance at $97,000. This is the highest it has seen since February, a significant move considering it had plummeted 30% low in April. The analysis herein seeks to explore the key reasons that could be behind the Bitcoin’s inclination to break the all-time high this year. We’ll then delve into the likely influences driving Bitcoin’s demand, before discussing the favorable technical aspects that may play a role in the crypto’s anticipated surge.
Plummeting Bitcoin Supply in Exchanges
One of the key reasons that show a bullish aspect for Bitcoin is the notable decrease in Bitcoin’s supply on different exchanges. Currently, the supply is down to 1.42 million coins, this being the lowest level of Bitcoin available on centralized exchanges in over six years (since around November 2018). This number is distressingly low compared to the 3.21 million coins initially available at its highest level in 2018.
Surprisingly, the supply of Bitcoin in locations external to exchanges has significantly escalated, with a total of 18.43 million Bitcoins. Such amounts indicate a buying rather than selling trend among investors, indicating potential supply scarcity as demand intensifies.
Several prominent Bitcoin holders have shown no signs of intending to sell soon; examples include Michael Saylor’s Strategy, which currently holds more than 2% of the total supply of Bitcoin. Other leading companies like Tesla, Coinbase, Block, and Galaxy Digital have also not hinted at selling anytime soon.
Institutional and Retail Demand Remaining High
Another crucial reason that may maintain Bitcoin’s rising price trend is the ongoing increase in demand from both retail and institutional clients. An exemplary indication of this is the inflow into Bitcoin exchange-traded funds. Data from SoSoValue reveals that since the commencement of Bitcoin ETFs in January last year, these funds have seen outflows in only four months.
The overall assets added to these funds surpass $40 billion. While Blackrock’s IBIT accumulates $60 billion in assets, Fidelity’s FBTC and Ark Invest’s ARKB accumulate $20 billion and $19 billion, respectively. Such inflow trends into ETFs indicate growing institutional demand in the U.S, and there’s potential for more from countries seeking to diversify from the U.S. dollar.
Such demand and supply dynamics explain the bullish stance of analysts on Bitcoin. For example, Standard Chartered analysts anticipate the coin to escalate to $200,000, while Ark Invest forecasts it to rise by $2.4 million come 2030. Bitcoin’s demand is also expected to soar as trade tensions ease.
Bitcoin’s Price and Technical Analysis
On a final note, Bitcoin’s price underpins definite technical pointers that have the potential to push it much higher in the long run. It has consistently stayed above the rising trendline, connected to the lowest swings since August 5, last year.
The crypto asset has managed to leap past the significant resistance level pegged at $88,690, which is the double-bottom pattern’s neckline. Furthermore, it has moved past both the 100-day and 50-day Exponential Moving Averages. All these demonstrate that the Bitcoin seems to be gaining momentum, and the first stop could be above $100,000, then proceed to surpass its all-time high.
So, Bitcoin continues to lead the charge in the cryptocurrency market with highly favorable supply and demand dynamics as well as technical merits to its name. Whether you are an investor, tech enthusiast, or merely following the digital news – keeping an eye on Bitcoin this 2022 could be worth your while.
