3 Reasons Why Bitcoin still has more BTC price increase
Bitcoin (BTC) briefly saw new 2023 highs this week but ultimately failed to break out of the range – is the bull run over?
Amid increasingly volatile conditions, BTC price action continues to struggle with overhead resistance near $50,000.
For traders, however, there is reason to believe that more significant price moves are just a matter of patience.
To deliver shocks from on-chain data and “reset” the underlying markets, the stars are aligning for the next round in the next Bitcoin bull market.
Cointelegraph took a closer look at these factors and found out who is optimistic about what BTC/USD will do next.
BTC price rises daily bull flag.
As US Bitcoin exchange-traded funds (ETFs) had their first day of trading, BTC/USD, in turn, rose to $3,000 – and then fell further.
While initially promising, Bitcoin has lost the momentum it needs to overcome sell-side pressure as it approaches the $50,000 mark for the first time since December 2021.
When that daily candle closed on January 11, Bitcoin was able to maintain its bullish structure, noted trader and social media analyst Alan Tardigrade said.
Uploading a chart to X (formerly Twitter), Tardigrade said that BTC/USD is now in a “bull flag” structure in a general correction – a known consolidation process.
“The latest candle is waiting for a breakout in a bull flag,” the comment section promises.
Bitcoin's market cap dominance marks the early stages of a classic bull market.
As Cointelegraph reports, Bitcoin, which was the first mover last year, is now relinquishing its share of crypto market capitalization to major altcoins – typical of how bull markets have started in the past.
For Tardigrade and his partner Matthew Hyland, the writing is on the wall.
Nice “head and shoulders” pattern on #Bitcoin Dominance seen by @MatthewHyland_ for days. Here is a chart comparison showing how bearish $BTC.D is and how bearish $ETH.D is. Please see both the horizontal support/resistance zone on BTC.D and the downside… pic.twitter.com/8gXLyeyYWE
— Trader Tardigrade (@TATrader_Alan) January 12, 2024
Funding rates have been reset as open interest triggers.
Laying the groundwork for sustained BTC price gains, derivatives markets remain “neutral” compared to recent weeks.
Data from statistics source CoinGlass shows that despite Bitcoin's upside, there has been a massive reset on exchanges.
The largest international exchange, Binance, now has independent funding on Bitcoin, along with OKX and Bybit, at the time of writing on January 12.
Meanwhile, the open interest, although higher, is now below the levels seen in early December, when BTC/USD entered at the beginning of the current trade.
Elevated demand levels have preceded several major “leakages” in recent weeks, during which rapid price declines eliminate many positions.
Analyzing the trend on January 10 – the date of the ETF's approval – on-chain analytics firm Glassnode, however, indicated that CME Group's dominance was increasing as overall open interest.
“This shows the presence of institutional investors in the derivatives space,” he told X subscribers.
Don't be afraid of Bitcoin supply congestion
The notion that US institutions now have carte blanche to engage in Bitcoin exposure has some wondering about the long-term supply impact.
Related: This Bitcoin ‘bull cross' is about to hit for the first time since 2016.
With a finite supply and a certain portion of tokens lost forever, one could see a major supply “squeeze” if major players demand a larger stake for their product.
While proponents predict this will drive up prices to the benefit of existing travelers, some are concerned about the growing illegal market.
Among them is Daniel Roberts, CEO and founder of Bitcoin miner Iris Energy.
“There's a big problem with Bitcoin ETFs that few are acknowledging,” he warned on X, along with a coin-to-penny chart of Bitcoin's current illicit supply.
We have never had an ETF with limited underlying supply. If ETFs buy 30% of available Bitcoin or those owners refuse to sell, we have a big problem.
In response, some of the Bitcoin household names — including Blockstream CEO Adam Temeles — were less surprised than ever.
“There's no problem,” argued the famous pseudo-analyst Beat Payne.
“The number goes up.”
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
