22 February 2024
While Bitcoin treads water around $50,000, with some predicting a slump, one analyst on X is swimming against the current, claiming the coin has “never been this bullish.” The coin is bullish despite cooling off from 2024 highs above $54,000.
Analyst: Bitcoin Is Bullish, Here’s Why
The analyst Mags argues that Bitcoin is, at spot rates, defying historical patterns and showing bullish signals, especially looking at the candlestick arrangements. Specifically, Bitcoin recently closed a weekly candle above the 0.618 Fibonacci level before the next halving event. Mags said this is the first time in the four-year cycle.
Therefore, though Bitcoin prices have been moving horizontally in the past few trading days, with fears of price slumps, the development in the weekly chart is overly bullish. Further bolstering their optimism, Mags points to the increasing demand for Bitcoin from institutional investors following the launch of spot Bitcoin exchange-traded funds (ETFs).
Wall Street heavyweights, including Fidelity, issue some of these products. BitMEX Research data shows that spot ETFs continue to siphon more and more coins from circulating supply, sending them to custodians, like Coinbase Custody, for safekeeping. These coins will likely be released in the coming years, not months.
Besides institutional interest, optimism for more price gains also stems from the absence of retail interest at spot rates. Data from Coinbase shows that unlike the spike in interest that drove Bitcoin to $70,000, mainly at the back of retailers, BTC prices are up, but the dynamics are changing.
Will Retailers Take BTC To New Levels?
Solid data reveals that retailers are mostly not interested in the coin at spot rates, looking at the amount retailers have been spending on the coin. By Q4 2021, retailers acquiring Bitcoin via Coinbase spent roughly $177 billion. However, this figure sharply fell throughout 2022 during the bear market, finding support in H2 2023.
Then, according to exchange data shared by Will Clemente on X, retailers began loading the coin from Q3 2023. The figure has risen to around $39 billion in Q1 2024–less than 25% of Q4 2021 volumes.
How retailers will impact the price of Bitcoin in the future is yet to be seen. In the past, retail fear of missing out (FOMO) has been a critical price driver. Presently, CoinStats sentiment tracker, Fear & Greed indicator, stands at 74, at “greed” territory, down from “extreme greed” on February 22.
This reduction could be possible because of the fake breakout that lifted Bitcoin above $53,000. The coin has support at $50,500 but generally remains in a bullish pattern.