Bitcoin (BTC) has dropped significantly from an annual high of $ 14,149 a few days ago. However, there are five signs that the real rally is just beginning.
Increasing HODLing activity, higher benchmarks, lower retail interest, higher timeframe violations, and technical indicators all indicate the possibility of more significant upside gains.
Breaks high time frames
Bitcoin has dropped more than 6% from an internal peak of more than $ 14,000, a level it has not seen since 2017.
But on the weekly and monthly timeframes, it showed a clear breakout. He saw his weekly and monthly lights close above $ 13,000 for the first time in nearly three years.
As mentioned earlier in Cointelegraph, the monthly chart shows that Bitcoin is well above the major moving averages. Technically, this means the momentum remains the same, but a healthy retreat can be beneficial.
Google Trends activity and social engagement remain low
At the peak of the uptrend, Google Trends activity for the keyword Bitcoin increased as retail demand rose. When market sentiment is welcomed, whales tend to make a profit, causing the market to fall.
In recent months, despite a strong rally in Bitcoin, Google Trends activity has been low. This indicates that not many retail investors are looking for Google’s dominant cryptocurrency.
Additionally, Bitcoin’s monthly tweet volume increased by just 7.8% in October, according to The Tie. The lack of interest from the retailer, despite the price being at the level of several years, indicates that Bitcoin may be in an early phase of a bull market.
Technical indicators show the rally isn’t overheating
According to Mayer Multiple, historical Bitcoin price cycles show that today’s BTC rally is not overheating.
Mayer Multiple analyzes the bitcoin price based on a 200-day moving average that estimates the long-term price trend. If the multiplier is above 2.4, it indicates that the upside potential is exceeded. For example, in 2017, when BTC hit $ 20,000, the multiplier increased to about 3.8.
Currently the Mayer Multiple from November 2 is hovering around 1.27. This shows that the rally has not been overheated or limited despite Bitcoin’s bullish rise from $ 3,600 to $ 13,350 since March.
Hash rate is still close to record highs
In the fall, northern parts of China experience the rainy season. Large mining centers that depend on hydropower can get cheaper electricity, so they can mine bitcoin more efficiently.
When the rainy season ended, there was a massive migration of miners to the northern region of China. So the hash rate of bitcoins dropped dramatically in a short time.
However, the 30-day average hash rate over the past year shows that bitcoin hash rates are still close to all-time highs. It currently hovers around 132 million terrachesh per second. For comparison, in January the hashish rate was well below 100 million TH / s.
HODLing business continues to evolve
Based on the HODL waves that measure the trend of long-term bitcoin holders, more and more investors are holding bitcoins for longer periods.
HODLing activity has increased since March, when the BTC price briefly dropped below $ 3,600. Since then, investors have been accumulating BTC.
The rising BTC stock, coupled with strong fundamentals, appropriate technical structure for a longer time frame, and positive technical indicators have boosted the overall market sentiment, which could eventually lead to a larger rally for Bitcoin.