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These 4 Factors Signal Bitcoin is Gearing Up for a Breakout Rally

  • The crypto market is heading into the weekend without any clear momentum, as the past week has been relatively quiet for Bitcoin
  • Many altcoins are still maintaining their firm upwards momentum, although this appears to be slowing down as investors grow more concerned about where Bitcoin may trend next
  • There are four factors that one analyst is closely observing that could provide BTC with better guidance in the near-term
  • This comes as the cryptocurrency continues building fundamental strength, as investors are still moving their BTC holdings away from exchanges at a rapid pace

Bitcoin and the aggregated cryptocurrency market are sending mixed signals to investors.

On the one hand, Bitcoin has seen historically low volatility that has come about in tandem with declining trading volume and liquidity. All the while, altcoins have been surging left and right, with many up well over 100% this year.

READ: Yield farming with idle stablecoins and cryptocurrency

It is possible that the benchmark cryptocurrency’s liquidity and trading volume is being siphoned into altcoins. If this is the case, then BTC may not be able to rally until altcoins start shedding their recent gains.

There are a few crucial factors to be considered in the near-term that could have an impact on Bitcoin’s next trend.

One analyst concludes that these factors all work in favor of buyers.

Bitcoin Sends Mixed Signals to Investors as Consolidation Phase Persists 

At the time of writing, Bitcoin is trading up marginally at its current price of $9,170.

This is around the level at which it has been trading throughout the past week.

On a few occasions, buyers did attempt to spark some notable volatility, but each attempt to do so proved to be short-lived.

This consolidation phase has come about despite strengthening fundamentals.

One metric showing the growth that Bitcoin has seen on this front is the amount of BTC currently held on exchanges.

Data shows that investors are still moving their holdings away from exchange wallets at a rapid pace in favor of cold storage. This points to them adopting a long-term investment strategy.

Data aggregator Unfolded spoke about this in a recent tweet, while offering a chart from Glassnode showing the declining on-exchange balance.

Bitcoin

Image Courtesy of Unfolded. Data via Glassnode.

Here are 4 Factors to Watch for Insight into Where BTC Trends Next 

One analyst recently explained that there are four primary factors he is watching for insight into where Bitcoin will trend next.

He concludes that these factors all signal an upwards breakout is imminent.

“A few things on the crypto market capitalization. 1 – Above 100-Day and 200-Day MA. 2 – Insane volume accumulation. 3 – Volume decrease -> big move coming up. 4 – As we took all the lows -> upwards break is more likely.”

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Image Courtesy of Crypto Michaël. Chart via TradingView.

For these factors to sway Bitcoin’s mid-term outlook, the crypto will need to first surmount the heavy resistance laced between $9,500 and $10,000.

Featured image from Unplash.
Charts and pricing data via TradingView.

These 4 Factors Signal Bitcoin is Gearing Up for a Breakout Rally

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cryptohero8
I am a believer of the HODL philosophy because we are still in the nascent stage of blockchain technology. Although we are in a bear market now, my outlook on the adoption and growth of blockchain solutions remains unchanged. Blockchain transactions has been growing exponentially and demand for cryptocurrency like Bitcoin [BTC], Ethereum [ETH], Ripple [XRP], Litecoin [LTC] and other Altcoins will only continue to grow exponentially in the next five to ten years.

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