Bitcoin (BTC) rallied above $ 38,000 after nearly 21 days of falling below that level, with the exception of the Elon Musk rally last week. There are four main factors that have coincided with the return of the BTC price above this key level, which could cause Bitcoin to return to $ 42,000.
These factors include a neutral relative strength index (RSI), reduced production, net current in a negative direction, and whale gathering.
Whale swarming coincides with an outflow of negative net prey.
According to the cryptocurrency trader who bears the pseudonym “Bitcoin Jack”, Bitcoin offers a “bowl and transaction” technological education.
A technical configuration usually signals a trend reversal, which will be quite definite if bitcoin continues to break in the short term.
The trader also confirmed negative stock market net flow from stock exchanges, which indicates signs of a bitcoin accumulation phase. Quoting CryptoQuant data, the trader wrote:
“Bitcoin is like a cup and a pen – the negative net flow of the stock market supports ATH’s new accumulation target approaching the corner for $ BTC.”
Net flow of bitcoin exchanges. Source: CryptoQuant
Net negative currency flows are an important calculation as they show Bitcoin is leaving the stock exchanges.
Investors with high net worth choose to remove bitcoins from stock exchanges after they have increased for security and self-service. When BTC is transferred to an unsecured wallet, no one other than the owner of the private keys will have access to it.
In addition, Glassnode analysts found that the number of whales holding bitcoin has skyrocketed this year. The combination of negative net current and an increase in whale numbers shows that the accumulation rate of bitcoin is still high. They wrote:
The number of bitcoin whales (units holding ≥ 1k $ BTC) has skyrocketed. Since the beginning of the year, more than 200 new whale units have appeared on the network – data confirming the status of institutions’ access.
Bitcoin RSI is neutral
Bitcoin’s RSI has returned over several time frames to around 50, which is neutral. The Relative Strength Index (RSI) is an indicator that measures whether an asset is in an overbought or oversold area.
If Bitcoin’s RSI crosses 75, it will be considered overbought; If it is below 30 it is considered oversold.
While Bitcoin is still close to being overbought on the daily and weekly timeframes, which are high timeframes, the RSI is between 45 and 60 above most lower timeframe charts. This indicates that Bitcoin has bullish potential in the short term.
Miner flow decreases
Bitcoin miners are one of the main sources of pressure from sellers on BTC as they bring unprecedented pressure from sellers.
When miners start selling their mined bitcoins on stock exchanges, it can put a lot of pressure on the short-term price cycle of bitcoins.
According to CryptoQuant data, the Miners Center Index (MPI) is in decline. At least for the foreseeable future, this means that selling pressure from the two metals will be low.