In the last three months the price of Bitcoin (BTC) has risen 170%. This is a massive recovery for the leading cryptocurrency, which was at $3,600 and is now at $9,733. For those of you who own BTC, there are three things to look out for that may cause another upswing, at least in the short term.
According to Cointelegraph, the three things are:
- An increasing exchange outflow
- Miner revenue finding support
- An increasing number of Hodlers
When the outflow of Bitcoin from exchanges increases, it suggests investors are preparing to hold BTC for the long term. Typically this is people withdrawing their BTC to a personal wallet and this means they have no intention to trade it.
The increase in exchange outflow happens to coincide with some recovery in miner revenue. Cointelegraph says: “As miners generate more BTC through mining in the aftermath of the latest hashrate difficulty adjustment, existing miners are becoming more profitable.”
It is also the case that if mining costs decline then the major BTC mining operations have fewer incentives to sell more BTC in the short term and that would have a positive influence on the BTC price.
The combination of fewer sellers in the Bitcoin market and a consistent increase in long-term hodlers raises the likelihood of a continued rally.
There is a possible downside if there are sharp shifts in BTC price and difficulties in mining BTC.
The view is that the ideal scenario for BTC in the coming months is this: the price of Bitcoin remains stable above $10,000 and the amount of BTC sold by miners on a daily basis continues to decline. If we see this happening then it is likely that the Bitcoin price could break out of “a multi-year resistance with growing confidence of both investors and miners, making a proper long-term bull market possible.”