While Bitcoin defends support at $ 15,000, the on-chain data indicate that the rally could extend beyond $ 16,000
Unable to go over the $15,960 wall, the price of Bitcoin (BTC) firmly defended the support at $15,000. Based on four on-chain parameters, analysts believe that the rally could continue well beyond $16,000.
Experts have in fact identified falling Bitcoin reserves on the exchanges, a largely immobile monetary offer, increasing number of „strong hands“ and low unrealized profits: all these factors increase the probability of further price increases.
Number of BTCs in the falling exchanges
Recently Delphi Digital, an independent crypto-currency research and consulting firm, published a report on Bitcoin’s future market prospects.
Paul Burlage, analyst at the company, pointed out that the on-chain parameters show a strong momentum for Bitcoin. Since 11 February to date, the number of BTCs in exchange reserves has decreased from 2.96 million to 2.41 million: a drop of BTC 550,000, a figure equivalent to $6.36 billion.
This is a very positive event for Bitcoin, as it indicates that fewer sellers are depositing their coins on the exchanges. Burlage explained:
„On February 11, 2020, BTCs on exchanges reached an all-time high of 2.96 million. Currently the number of BTCs on exchanges is about 2.41 million. We have seen a divergence between reserves and BTC price, suggesting a more sustainable upward movement for cryptocurrency“.
Bitcoin exchange reserves
More and more BTC real estate
As fewer and fewer sellers are moving their funds to exchanges, BTC’s real estate offering remains high.
On 9 September, Burlage explained that the percentage of BTC’s real estate offering has reached a new all-time high, at 63.5%. Since then this figure has fallen slightly, currently at 62%, but still remains extremely high:
„Over the past week, we have seen a slight decline in the percentage of real estate offering for a year or more. After reaching an all-time high of 63.5% on 9 September, 62% of BTC’s offering is now real estate“.
This shows that investors are HODLing BTC rather than selling it, despite recent price increases.
We still do not see the roof of the latest increase
In recent weeks the number of „weak hands“ has decreased significantly, while strong hands have increased. The reduction of buyers in the short term and the increase of HODLers in the long term indicates that the Bitcoin rally could be lasting.
This trend coincides with the resilience shown by Bitcoin above $15,000, showing that this resistance is rapidly turning into solid support. In this regard, Burlage commented:
„Although local highs tend to fall for weak hands, we cannot yet confirm that the recent increase in the speculative base has reached a peak. That said, the broader trends suggest that strong, not speculative hands are populating the short-term time windows“.
In July last year, the price of Bitcoin reached a peak of about $14,000. Then Rafael Schultze-Kraft, Chief Technical Officer at Glassnode, said that Bitcoin’s Relative Unrealized Profit was about $0.64.
Bitcoin’s Relative Unrealized Profit
Right now, although Bitcoin is well above $15,000, Relative Unrealized Profit is just 0.53. This shows that BTC has the potential to get an even bigger price increase before a pullback.