Bitcoin has once again caused a stir around the financial world, with the price of a coin pushing over $85,000. This new high of the cryptocurrency comes when the world economy is swinging back and forth.
Bitcoin has crossed into what some analysts call the ‘Banana zone,’ a period of scorching upward momentum featuring extreme hype.
For weeks, Bitcoin has been building up its leap above the $88,000 threshold as a culmination of market and political reasons. It is one of the most remarkable rallies because of the near total profitability of Bitcoin holders.
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According to recent data, almost 100% of Bitcoin addresses are profitable. Here, we see the percentage of Bitcoin addresses whose current value exceeds their acquisition cost and what an almost uniform win looks like for investors.
Bitcoin Technical Analysis: Indicators of a Strong Bull Market
From a technical standpoint, Bitcoin’s current performance is in lockstep with an obvious bullish trend. At the 4-hour chart of Bitcoin/USD on Bitstamp, we can see that Bitcoin trades higher than its 50-day, 100-day, and 200-day simple moving averages. These averages were at $74,104, $71,839, and $68,798, respectively).
These moving averages can be used as indicators of medium-to long-term market sentiment. Based on prices above these levels generally implies that these moving averages are being used to provide strong underlying support.
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Additionally, the Money Flow Index (MFI) an oscillator that uses both price and volume data, has a value of 83.71. Such a level implies high buying pressure while signaling overbought assets in the short term.
Above 80, the MFI may signal a pullback as buyers run out. However, BTC has consistently been overbought for a long time during the biggest bull markets when demand continues to exceed supply.
They are also monitoring the volume profile, which has steadily risen, especially around support levels. Investors constantly put more money into a particular investment, so this volume buildup is often considered an indication of continued interest.
On the surface, it’s clear that such technical patterns only reinforce the bullish sentiment, and many are looking to the next $90,000 as a realistic target no matter what if this buying momentum keeps going.
Bitcoin addresses aren’t made more profitable by retail speculation alone. Institutional investors are also involved. In past years, banks and financial asset management companies have started to include Bitcoin in their portfolios. This is to diversify from traditional risk products and hedge other market risks.
What’s the Way Forward for BTC?
There is a stable foundation for Bitcoin’s price from institutional adoption, which has made the price less prone to external pressures like we may have seen in the past.
Currently sitting at over $88,000 and hitting roughly every BTC holder who isn’t clueless about their net worth, the market is off the rails with speculation about what will be next.
BTC has strong fundamentals, so short-term corrections are always possible, but the fundamentals that drive this growth remain.
