Michael Kapilkov


The last time this much Bitcoin was withdrawn from exchanges, the price rose 88%. If this pattern repeats, we would see Bitcoin go to $18,000 by the end of August.

On June 8, 27,000 more Bitcoin (BTC) was withdrawn from exchanges than was deposited. The last time there was such a significant outflow, Bitcoin appreciated by 88%.

The trend toward users withdrawing their assets from centralized exchanges has gained momentum since Black Thursday. However, the amount of Bitcoin they removed yesterday is outstanding even within the context of this trend — $265 million worth.

Bitcoin daily exchange net flows. Source: Glassnode.

Hodling logic explained

On March 19, users withdrew 31,000 BTC ($198 million), and then on March 24, another 27,000 BTC ($180 million). The price of Bitcoin on March 18 was $5,238. By May 7, it had shot up to $9,892.

What could be the correlation or even causation between users withdrawing funds from exchanges and the price of BTC? If a user expects to sell their Bitcoin in the near future, they will keep it on an exchange.

$18,000 by August?

Conversely, if the same user expects price appreciation, they are more likely to withdraw their funds to a noncustodial wallet for better long-term safekeeping. As more Bitcoin leaves the short-term supply, price tends to appreciate, provided that demand stays the same.

However, in markets, there is always more than one factor that is affecting the price.

Bitcoin seven-day average exchange net flows. Source: Glassnode.

Examining the seven-day average for the same metric since Black Thursday, it has barely peaked above the waterline. This would indicate long-term hodling sentiment on the part of crypto investors.

If we were to experience the same appreciation as last time, then the price of Bitcoin would reach $18,000 by the end of July. This would align with recent predictions from Bloomberg.

Author: Michael Kapilkov

Source: Coin Telegraph: Last Time This Happened, BTC Gained $4K

A recent Bloomberg report concluded that Bitcoin may be priming for a massive bull run.

A recent Bloomberg report states that Bitcoin (BTC) is preparing for a massive bull run.

Even the report’s name is bullish — “Bitcoin Maturation Leap”. The report mentions a number of reasons that the Bitcoin market is maturing, and that it is due for a bull run. It also affirms that “Bitcoin is gaining relative fuel as stocks reset, if history is a guide”.

Bitcoin becoming digital gold

Furthermore, Bloomberg says that Bitcoin and gold, both considered hedge assets, are expected to win the most from the recent COVID-19 induced market turmoil:

“Bitcoin and gold also stand to be primary beneficiaries of the unprecedented monetary stimulus that’s accompanied by a mean-reverting stock market.”

It also observes that Bitcoin’s correlation to gold “has increased to all-time highs”, concluding:

“This year will confirm Bitcoin’s transition from a risk-on speculative asset to the crypto market’s version of gold.”

The report reiterates that 2020 will be the year when Bitcoin becomes digital gold:

“This year marks a key test for Bitcoin’s transition toward a quasi-currency like gold, and we expect it to pass.”

Futures tamed Bitcoin’s bull run

According to the Bloomberg report, the inception of Bitcoin futures has tamed “the raging Bitcoin bull market”. At the same time, it says:

“Increasing futures open interest, declining volatility and relative outperformance despite the stock-market shakeout indicates Bitcoin is maturing from a speculative crypto asset toward a digital version of gold.”

The report says that we can expect Bitcoin volatility to continue to decrease. This is significant since the all-time low volatility in October 2015 “marked the beginning of the bull market”.

Bitcoin is undervalued relative to on-chain metrics

The Bloomberg report asserts that Bitcoin is undervalued relative to some key indicators. For instance, on April 2, one of the indicators pointed to the $9,000 Bitcoin price versus the actual $6,600. It also states that those metrics support the transitioning of Bitcoin to digital gold:

“Increasing addresses support Bitcoin’s transition toward a digital version of gold”.

With central banks around the world pouring trillions of dollars into the economy, 2020 may be the year when Bitcoin becomes the new digital gold for the digital economy.

Author: Michael Kapilkov

Source: Coin Telegraph: Bloomberg: Bitcoin Is Setting Up For 2017-Like Bull Run

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