BTC price breaks out – Bitcoin analyst sees „accumulation signals
The Bitcoin price is expected to continue to rise in the coming sessions as a historically accurate indicator shows signs of significant accumulation.
Discovered by TradingShot, an independent market analysis portal, the „on-chain smart money indicator“ shows that influential traders/investors are buying Crypto Investor en masse. This happens even though the crypto currency is not able to hold more than $12,000.
It therefore indicates strong support at $10,000 – a level that Bitcoin has held since the end of July 2020.
„This is a bullish sign for Q4,“ says an analyst at TradingShot. „The price is generally going into a bullish trend [after finding an accumulation of smart money in the chain].
Structure of the Bitcoin chart as presented by TradingShot. Source: TradingView.com
He further explains using a fractal from November 2018, when Bitcoin was traded at $6,000 but was heading towards $3,000, the smart money indicator began to flash and give accumulation signals.
„While the BTCs accumulated at 6k suffered an almost 50 percent loss, the price soon rose to 12k+, generating a 2x,“ the analyst adds.
A Bullish Bitcoin Thesis
The indicator has shown the willingness of influential traders, also known as „whales“ in the crypto-trader community. They have assumed healthy retreats to the volatile downward movement of Bitcoin.
And while the smaller players are panic-stricken to sell their stocks, the big players have been buying them cheap as part of their long-term strategy.
Since Bitcoin has repeatedly denied rallies above $12,000, but maintains a solid price floor at $10,000, analysts expect the crypto currency to experience a bullish breakout. One of the reasons for this is the growing proximity to traditional investments.
Bitcoin has shown an erratic correlation with stocks and gold futures, as it is traded inversely to the US dollar.
All eyes are now focused on two macro bases: Economic stimulus packages and the US presidential election. Bitcoin has shown signs of strong upward movement as a direct result of a possible coronavirus rescue package.
Democratic House Speaker Nancy Pelosi confirmed on Sunday that she is negotiating a $2.2 trillion contract with Treasury Secretary Steven Mnuchin.
„We are close to a deal,“ Pelosi said.
Nevertheless, some uncertainty remains. According to CBSN Boston, the progress made between Pelosi and Mnuchin would still have to be approved by the GOP-controlled Senate before it could become law. And:
„Senate Majority Leader Mitch McConnell suspended his chamber until October 19 after three Republican senators tested positive for COVID-19 following the President’s positive test. He said, however, that he could call the senators back to speak if agreement is reached on a new economic package.
The Washington Post reports that the second stimulus package will be completed by the end of this week. If it does, it could lead to a sell-off of the US dollar. This would help Bitcoin make the jump to $12,000.
However, some analysts believe that there will be no deal before the presidential elections on November 3. Should this happen, investors would probably remain hedged in the US dollar market.
As a result, Bitcoin could continue to experience unsettled trading sessions with the risk of falling below $10,000.