According to Ki Young Ju, the Bitcoin price has numerous catalysts that could push it higher despite the recent volatility. On Wednesday morning, BTC was trading at $56,754, having risen for two consecutive days. This price was significantly higher than this week’s low of $49,000.
Catalysts for Bitcoin
In an X post, Young, who founded CryptoQuant, a leading crypto analysis firm, identified four reasons Bitcoin price could soar. First, he noted that Bitcoin’s hash rate was improving, which is a sign that the recent miner capitulation was ending. Miner capitulation is when mining companies dump their vast coins into the market.
Second, he noted that retail investors were mostly absent in the recent price action. Instead, most of the recent trend has happened because of the rising institutional investor activity.
Further, he saw that whales were accumulating Bitcoin, with inflows into custody wallets rising. Permanent holder addresses jumped by 404k coins, helped by the spot activity. One of the whales actively buying Bitcoin is MicroStrategy, which is raising $2 billion to buy Bitcoins.
Finally, Young said that old whales, big investors who have held BTC for three years, have not been actively selling recently.
There are other potential bullish catalysts for Bitcoin. First, there are signs that the Federal Reserve will start cutting interest rates in the next meeting, which bodes well with risky assets like crypto and tech stocks.
Bitcoin price has bullish technicals
Second, charts show that the Bitcoin price has a few bullish technicals. The daily chart above shows that the accumulation and distribution indicator has tilted upwards in the past few weeks, meaning that investors are still buying.
Third, the token has formed a hammer candlestick pattern, a popular bullish sign. Bitcoin has also formed a falling broadening wedge as it did in 2020 at the onsight of the COVID-19 pandemic.
Therefore, if these patterns work well, there are signs that Bitcoin will stage a comeback and retest the upper side of the wedge at $70,000. However, there are also some potential risks.
BTC is about to form a death cross on the daily chart, where the 50-day and 200-day moving averages cross each other. In most cases, this is one of the riskiest patterns in the market. The other risk is that this rebound could be a dead cat bounce.
