Bitcoin analyst offers four the explanation why BTC worth will hit $ 22,000 subsequent
Philip Swift, a Bitcoin (BTC) analyst and inventor of Lookintobitcoin.com, set out four reasons why BTC is headed for $ 22,000. Both fundamental and technical factors suggest that the top cryptocurrency is gaining momentum.
The one-year HODL percentage, the decline in Bitcoin exchange rate reserves, the neutral funding rates, and the institutional accumulation point to an ongoing BTC rally. Swift wrote:
“1 year HODL% still very high? Yes. Bitcoin being rushed by the exchanges? Yes. Financing still neutral? Yes. Institutions Still Buying? Yes. Cool, see you at $ 22,000 in a couple of weeks when the price hits 350 x 2 x 2 golden ratio multiplier. "
Since the beginning of the fourth quarter on October 1, the price of Bitcoin on Binance has increased from $ 10,773 to $ 16,730.
BTC / USD daily price chart since October 1st. Source: TradingView.com
The HODL percentage shows investor confidence
The Bitcoin sector refers to longtime BTC owners as "HODLers". The annual HODL wave shows the growth in the number of investors who have held BTC for over a year.
Since the crash in March, the one-year HODL wave has increased from 59% to over 62%. It is now at an all-time high, indicating a clear trend towards accumulation.
The one-year Bitcoin HODL Wave. Source: lookintobitcoin.com
As the number of HODLers increases, there is an appetite to buy and hold Bitcoin for a long time. The ongoing trend could show that investors expect a broader Bitcoin rally over the long term.
The financing rates are neutral
During the bull cycles, Bitcoin funding rates can go up significantly as long holders or buyers overwhelm short sellers.
The Bitcoin futures market uses the financing interest mechanism to ensure a fair balance with the market. When there are more longs than shorts, the funding rate becomes positive. In this case buyers have to compensate short sellers and vice versa.
The average funding rate for Bitcoin futures contracts is around 0.01%. Over the past few months, the funding rate has stayed around 0.01% or sometimes below.
This shows that there is a good balance between buyers and sellers and that the market has not yet overheated.
Bitcoin reserves are falling
As Cointelegraph reported yesterday, around 145,000 BTC suspended exchanges last month.
Bitcoin's $ 2.3 billion monthly outflow suggests investors' intent to hold their BTC holdings for the long term.
Investors need to deposit BTC on exchanges to sell their holdings. When the outflows increase, it usually indicates that investors are planning on holding BTC for an extended period of time.
Institutional accumulation is growing
In the US, grayscale remains the preferred entry point for institutional investors in Bitcoin. The Grayscale Bitcoin Trust is the closest investment vehicle to an exchange traded fund as it is publicly traded in the US.
According to Grayscale, the company now holds more than 500,000 BTC, which is worth over $ 8.35 billion at a price of $ 16,700.
Institutes continued to accumulate Bitcoin as it has rallied sharply since early 2020. BTC's resilience, especially as it consistently outperforms gold, has made the value proposition more compelling for institutions over the year.