With the price of Bitcoin staying above $11,000, a bullish reversal trend is forming
In the past few hours, the price of Bitcoin (BTC) rose rapidly from a low of $10,500 in early October, breaking through $11,000. Analysts attribute the sudden reversal of Bitcoin to three factors.
The catalyst for this rise may be the hoarding of whales, the surge in institutional demand and the strong support level of $10,500.
Either whales are hoarding, or whales refuse to sell
Earlier this week, Cointelegraph reported that the activity of the whale cluster indicated that Bitcoin and Ethereum whales have strong buying demand. In the cryptocurrency market, individual investors who hold large amounts of Bitcoin are considered whales.
Whalemap data shows that whales may start buying Bitcoin from 10,370 dollars. On October 8, analysts stated that the support level of 10,570 dollars remained unchanged. This shows that the whale has bought a large amount of bitcoins at a price between $10,407 and $10,570.
Since whales usually account for a large part of the buying demand and selling pressure in the Bitcoin market, the hoarding of whales is an important catalyst.
Institutional demand is on the rise due to large investments in Bitcoin by companies that have received much attention
In the past two months alone, two multi-billion-dollar conglomerates have publicly purchased large amounts of Bitcoin.
First, MicroStrategy revealed that it purchased $250 million worth of Bitcoin on August 11. Subsequently, the company issued another statement stating that it had purchased an additional $175 million worth of bitcoin.
After MicroStrategy’s announcement, Square, a payment company with a market capitalization of $81 billion, said it bought $50 million worth of Bitcoin.
According to senior market analyst Peter Brandt, after the investment in Square, Bitcoin’s daily and weekly charts indicate that there will be a “huge buy signal”.
Brandt emphasized that investment by large companies is a very important thing for Bitcoin. He pointed out:
“A global company now includes Bitcoin on its balance sheet. This is a major development. Both the weekly and daily charts will send a huge buy signal.”
Since August, the Bitcoin transaction volume of institutions such as lmaxdigital and Bakkt has continued to soar.
In addition to favorable fundamental factors such as whale hoarding and rising computing power, the growth of institutional interest in Bitcoin (BTC) has also added additional impetus to Bitcoin’s price increase.
Bitcoin continues to maintain support at $10,500
In the past three months, the $10,500 area has been a key support level for Bitcoin. It has important historical relevance and has become a key level of short-term price cycles.
Technically speaking, maintaining a support level of $10,500 is critical to maintaining Bitcoin’s upward trend. This level is the peak in July 2019, indicating that Bitcoin is using the previous peak to continue to rebound to new highs.
Ki Young Ju, CEO of on-chain analytics provider CryptoQuant, said that the net inflow of bitcoin from exchanges has fallen to its lowest point in a year.
Normally, sellers deposit bitcoins on exchanges in order to sell this dominant cryptocurrency. Therefore, when the Bitcoin reserves of the trading platform are insufficient, it means that the selling pressure will be reduced.
He said:
“The net inflow of bitcoin to exchanges recently hit a year low. In most cases, when the bull market is about to begin, the net inflow of bitcoin to exchanges may remain negative. I want to say that the same is true for the 2017 bull market.”
Under the combined effect of declining selling pressure, rising institutional demand, and favorable technical structure, Bitcoin may successfully turn $11,000 from resistance to support.
