On Friday, January 29, the world’s richest man Elon Musk stormed the Satoshi Street by changing his Twitter bio to ‘#bitcoin’. Breaking past is two weeks of downward momentum, BTC surged all the way above $38,000. However, this remained a momentary spike as profit-booking ensued soon after.
Again the BTC price continues to oscillate minorly consolidating around $34,000 levels. While this happens, BTC has seen a massive influx of new users investing in Bitcoin. As analyst Willy Woo points out, the number of new users coming per day is much higher than any other time during the recent bull market.
Interestingly, this comes just at a time when reports are out that Bitcoin supporters are planning for a GameStop-like event in Bitcoin. The r/Bitcoin Reddit community has seen a solid spike in new users joining.
Analyst Willy Woo points out a number of other factors that suggest that heavy bitcoin selling is not in sight. To explain this, Woo points out the key metric of the SOPR indicator from Glassnode. Woo notes:
“SOPR tracks profit-taken when coins being sold. It hit the 1.0 line which means we completely reset. To go lower we’d need to have investors sell at a loss. This would need a bear phase (that’s is NOT on the cards with the current setup)”
Well, the Elon Musk tweet has skewed it kind-off, but the SOPR indicator is again approaching 1.0 level. On the other hand, the Bitcoin (BTC) on-chain relative-strength-index (RSI) is currently in the lower band of the bull run. This is pretty much closer to the reset stage and suggests that the price is no more overheated.
Another key indicator that Woo mentions is that the shrinking BTC liquidity and a large number of Bitcoins moving off exchanges. This suggests that coin buyers are strong HODLers who will seldom sell.
In his concluding notes, Woo writes: “With the current flows of capital coming in, the consolidation floor is expected to be $29k on daily closes (short of a black swan event), upper bound would be $56k (but rising quickly each day)”. Author of Stock-to-Flow (S2F) model PlanB also mentions that the S&P 500-implied price of Bitcoin (BTC) is also 60K.
— PlanB (@100trillionUSD) January 30, 2021
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