4 Signs Bitcoin Is Ready to Reach $38K and Target New Highs

Bitcoin is likely to break $38K resistance if these four factors support the upsideimpulse.

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BTC price is trying to overcome resistance again$38K after nearly 21 days below that level (not counting last week's Musk rally). There are four significant factors that have coincided with the current BTC price rebound that could help Bitcoin continue its march toward $42K.

These factors include neutral valuesRSI indicator, decreased selling pressure from miners, negative inflow / outflow ratio at exchange addresses and signs of accumulation of bitcoins by “whales”.

The accumulation of BTC by whales coincides with the outflow of funds from exchange wallets

According to the popular crypto trader Bitcoin Jack (@BTC_JackSparrow), on small timeframes, the BTC price forms a setup resembling a "cup and handle".

Such a formation usually indicates a return to an uptrend, which will be practically confirmed in the event of a resistance breakout in the near term.

Referring to CryptoQuant data, Bitcoin Jack also draws attention to the negative ratio of inflow / outflow of funds on exchange addresses, which can be interpreted as a sign of the accumulation phase:

“The BTC chart resembles a “cup and handle” formation, the outflow of funds from exchanges speaks in favor of the thesis about the accumulation phase. It looks like new highs are just around the corner.”

Inflow / outflow of funds from cryptocurrency exchanges. : CryptoQuant

The negative ratio of inflow / outflow of funds on exchange addresses is an important factor indicating the outflow of BTC from exchanges.

Wealthy investors prefer not to storetheir bitcoins on exchanges for security reasons and the desire to personally dispose of the secret keys of their coins. Therefore, having finished with the accumulation and not planning new operations in the near future, they usually withdraw the cryptocurrency to their personal wallets.

In addition, Glassnode analysts recentlyconfirmed that the number of bitcoin whales has increased significantly over the past year. The negative ratio of inflow / outflow of funds on exchange addresses, combined with an increase in the number of bitcoin whales, indicates that the level of accumulation of BTC by market participants remains high. Glassnode wrote:

“The number of Bitcoin whales (entities controlling ≥1k BTC) has grown astonishingly. Since the beginning of the year, more than 200 new whales have appeared on the network, and this confirms the influx of institutional money.”

RSI at neutral values

Bitcoin RSI on many timeframes is back inarea 50, to neutral values. RSI is a Relative Strength Index that helps to determine, with some probability, whether an asset is “overbought” or “oversold” at any given time.

If the RSI rises above 70, it can be considered an “overbought” sign of the asset; if it falls below 30, it is a sign of its "oversold".

Although on high timeframes (daily and weekly)Bitcoin is still close to overbought, with Bitcoin's RSI between 45 and 60 on most lower time frames. This suggests that BTC has near-term upside potential.

Reduced selling pressure from miners

Bitcoin miners are one of the mainsources of selling pressure in the Bitcoin market because they sell newly issued BTC they receive for finding blocks in order to cover their costs.

Thus, when miners start actively selling mined BTC, it can put significant pressure on the short-term behavior of the bitcoin price.

Bitcoin miners position index. : CryptoQuant

According to CryptoQuant, the value of the position indexminers (MPI) is declining. At least for the foreseeable future, this means that the selling pressure from miners is likely to be relatively low.

 

The article does not contain investment recommendations,all the opinions expressed express exclusively the personal opinions of the author and the respondents. Any activity related to investing and trading in the markets carries risks. Make your own decisions responsibly and independently.

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