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Bitcoin looks ready for its next leg.
An ongoing battle between bulls and bears is currently taking place over the 200-day moving average of the Bitcoin price. The 200-day moving average is often viewed as a key indicator of the momentum of a given asset by traders and market analysts alike, so the recent resistance and the gap above and below the indicator is quite illuminating.
But be careful, because one of the most important Bitcoin market trends of the last two years suggests an extreme strength of the Bitcoin price in the coming weeks / months.
Bitcoin wallet, often covered in The Daily Dive, continues the dominant trend it has been following since early 2020 – massive accumulation and withdrawal of coins from exchanges.
In fact, there have only been two more times in Bitcoin’s history that more Bitcoin has been withdrawn from exchanges on a net basis. The first followed directly on from the COVID-19 induced derivatives explosion, which weighed on global markets and slumped Bitcoin price by nearly 50% in a single day.
The second opportunity came in November last year following the announcement of the adoption of a corporate Bitcoin standard by business intelligence firm MicroStrategy and a $ 50 million purchase by fintech firm Square.
Looking at the percentage of bitcoin supply in circulation that is not traded on exchanges and the price of bitcoin, there has been an almost one-to-one correlation over the past 18 months, with occasional price lags.
We saw this in the summer of 2020 when Bitcoin was withdrawn from the exchanges at a feverish pace on a net basis while the price slept until November when Bitcoin began its violent upward trend.
