In the past, the digital asset saw a long-term rally when the monthly closing price of the Bitcoin (BTC) candle was higher than the previous candle.
In addition to that higher timeframe, the monthly Bitcoin candle price closed above $ 13,000 for the first time since 2017. Additionally, the dominant cryptocurrency has shown clear signs of a breakthrough in the past two months.
Why Bitcoin May Hit New Highs
In terms of the “BTC rebound” narrative, the timing for the new Bitcoin rebound is appropriate. First, and perhaps most importantly, Bitcoin is currently on a halving cycle.
Every four years, Bitcoin receives half the block reward, reducing the speed of the new BTC mining by 50%.
After halving in the last two cycles, BTC prices usually peak in 14 to 16 months. Therefore, the climax of the next big rally in mid-2021 will have historical significance.
Second, as reported by Cointelegraph, there is little interest from ordinary investors and new retail investors. Most of the demand for Bitcoin appears to be coming from whales, high net worth individuals, and what analysts call “smart money.”
The trading volume of BTC futures contracts. Source: Digital Asset Data
As shown in the above figure, you can also see the trend of increasing participation in trading volume in Bitcoin derivatives markets like CME, Bakkt and LedgerX, as well as central exchanges that offer futures trading.
In 2017, Bitcoin saw an inflow of new retail funds into the United States, South Korea, and Japan. As a result, the spot trading volume increased in a short period of time, causing BTC to hit $ 20,000.
This time around, although the size of the spot market is growing rapidly according to digital asset data and opaque research, the main concern is no longer 2017.
Hence, there is even more room for growth in the foreseeable future, especially as retail interest picks up.
What can restore the prevailing appetite?
Three years ago, people’s excitement for bitcoin and cryptocurrencies was high, as bitcoin and cryptocurrencies rose much faster than stocks and other risky assets.
New retail investors are drawn to the unprecedented volatility of cryptocurrencies, which has caused Bitcoin to rise to a whole new level.
Right now, Bitcoin is showing a pretty bullish trend when it bounces off weekly and monthly charts without major losses. Bitcoin’s tremendous momentum, if it continues to grow without major corrections, can lead to a return of mainstream interest.
As traders and analysts have pointed out, investor awareness of Bitcoin has increased significantly as more and more large companies and billionaires add Bitcoin to their portfolios.
According to Cointelegraph, hedge fund billionaire Stan Druckermiller (Stan Druckermiller) was recently the last known investor to showcase his Bitcoin investment.
Building on this trend, Michael Van de Pope, a full-time trader on the Amsterdam Stock Exchange, said that market sentiment may remain bullish. He wrote:
“After Michael Saylor and other companies invest in #Bitcoin, it’s time for Stan Druckmiller. Next, it’s just a matter of time.
After the bitcoin price hit $ 15,000 for the first time since 2017, it showed resilience. After a strong uptrend, historical evidence suggests that December will see a broader rebound.