Bitcoin explodes above $43,000 - is the rocket about to take off?
What a price explosion! Bitcoin has reached $43K before - but not with these characteristics. The market seems healthy and virtually unleveraged. Greed is just showing its face after months of fear. How did we get here? Through calm and consistent accumulation. What does this mean for the future of the BTC price? Is the rocket about to take off?
Before we get into that, let's take a look at this chart by Dylan LeClair of Bitcoin Magazine. He is challenging the US Federal Reserve's balance sheet as the most optimistic Bitcoin chart.
The difference is startling. In February, Bitcoin got here by borrowing money from the exchanges. The futures market was on fire and growing. The bloodbath was still a month away. Today, leverage is just rearing its head after a few months in the red. The casino is almost empty. Real money has driven the rise from hell. Gradually, step by step.
Does this mean we are about to see a sudden breakout into space?
If not through leverage - then where is the money coming from?
Some institutions are probably buying. There is a good chance that bitcoin holdings will be reported in the next quarter. However, according to on-chain analyst Will Clemente, there are signs that "real" everyday people are joining the network all the time. And these new Bitcoiners are joining an army of believers who never stop buying.
Bitcoin's Gini coefficient is getting healthier and healthier. According to William Clemente, when you filter out ETFs and Grayscale, the on-chain analytics show that "over time, the whales just spread their coins out." According to him, companies with less than 10 BTC never stop buying. "Since 19 May, retail investors have accumulated more than the whales". With each passing day, Bitcoin's "healthy network distribution" gets better and better.
The investment strategy of dollar-cost averaging is gaining traction with a segment of the population. And it seems to be spreading. Investopedia defines DCA as:
An investment strategy in which an investor divides the total amount to be invested among regular purchases of a target asset in order to reduce the impact of volatility on the total purchase. Purchases are made regardless of the asset's price and at regular intervals. This strategy eliminates much of the detailed work involved in trying to time the market to buy stocks at the best prices.
What will happen when leverage comes back into play?
When greed returns and leverage is available, people will use it. What will happen then? Go back to LeClair's chart and look at October 2020 - the last time leverage was in the red. Could we be in for a similar spike as then? The chart shared by this pseudonymous analyst suggests so.
#Bitcoin weekly candles are sized similar to the run from 11k to 19.5k. 19.5k is where we had serious resistance for few weeks (as now with 42k). Then it was off to the races and the price tripled. Tripling from here is 120k.
We could be on the threshold of a historic moment. The indicators and characteristics seem healthy and ready for a breakthrough. Community morale is high despite recent regulatory threats. If all these analysts are right, see you on the moon, bulls!