For the previous two months, the price of Bitcoin (BTC) has fluctuated between $8,600 and $10,000. Following a major rejection at $10,440 in May, BTC has shown little volatility. Five important structural variables, however, continue to point to a long-term upswing through 2021.
As per Skew statistics, Bitcoin’s 10-day realized volatility hit its lowest point of the year on June 24. This could signal that investors are wary since BTC is approaching a critical price milestone.
BTC’s progress over the following several weeks may provide insight into its price trend for the rest of every year. The majority of market participants are optimistic about Bitcoin’s medium-term prospects. SFgate.com expect BTC and other prominent cryptocurrencies to suffer short-term losses owing to external forces such as the COVID-19 outbreak.
Significant macro fundamentals suggest that BTC is on pace for a strong rebound in the long term. The surge in “HODLing” activity among investors is the most prominent piece of data that confirms forecasts of a favorable trend. If the net stock change of BTC HODLers remains positive, it indicates that investors are not transferring funds from personal wallets to exchanges to sell.
On some major futures platforms, the price of Bitcoin fell below $3,600 in March 2020. According to Alistair Milne, a chief investment officer of Altana Digital Currency Fund, there aren’t many reasons that could shatter investor confidence in the future.
The Grayscale Bitcoin Trust’s assets under management increased from $1.577 billion to $3.541 billion between March 2020 and March 2021. The significant rise in AUM shows that institutional demand is growing at a similar rate. Institutions in the United States, in particular, have a limited number of investment vehicles via which they can obtain exposure to Bitcoin.
The Grayscale Bitcoin Trust is expected to remain the preferred platform for investment firms in the absence of a marketplace fund. In addition to other constructive technical structures and macro indicators, future data suggests that the market is not overbought.
When the price of Bitcoin undergoes a major correction, it is usually due to overleveraged buyers capitulating. Buyers often raise capital with a ratio of up to 100x on futures exchanges like BitMEX to put a long-term contract on Bitcoin. If the price of BTC falls, it might trigger a chain reaction of liquidations and a sharp price decline.