Jaipur (CoinChapter.com) — Bitcoin price dropped more than 50% after a meteoric rise to near $65,000. The selloff was led by investors spooked by Elon Musk’s tone reversal on BTC and the Chinese crypto crackdown.
But the HODLers were apparently unperturbed by the crash. In fact, data shows that bitcoin holding addresses (aka “unspent holdings”) have risen dramatically (read doubled) year on year. What does this mean? Is BTC getting ready for another bumper rally?
Bitcoin Addresses “Not Spending BTC” Doubled YoY
Trader, investor, financial analyst Vince Prince recently apprised his followers about an interesting on-chain bitcoin metric. According to him, the number of addresses “purely holding BTC” has grown two-fold compared to the past year.
Now, this is where it gets interesting. BTC price crashed by more than 50%, and still, there’s a 2X growth in bitcoin holding addresses compared to 2020. With 7 more months to go, this presents an incredible scenario. HODLers (aka strong/diamond hands) expect the upward momentum to pick up soon after the recent cool-off phase.
Let’s see if the technicals support the bullish optimism.
BTC Is Busy Moving Within A Triangle, Rally Ahead?
While Vince Prince shared the above chart on his Twitter handle, in his latest bitcoin price analysis on TradingView, he pointed out how BTC is trading within a triangle-shaped formation /pattern.
The above formation is reminiscent of something which technical analysts fondly call a bullish wedge. Assets trading in such patterns is poised for bumper breakouts. These rallies last until the distance equivalent to the shortest side of the triangle formation is covered.
VincePrince, in his analysis, pointed out a $45,950 resistance up to which BTC could rally before retaking a breather.
But Why Would Such A Rally Take Place At All?
Technically, bitcoin price after the crash has entered a consolidation phase where price movements have plateaued. With any asset, such scenarios result in sudden volatility surges in either direction because it’s like capital markets remain volatile.
In this case, since folks are not selling their bitcoin holdings and instead of accumulating, there is a good enough chance of price moving north.
This can be corroborated by a recent development that supports bitcoin’s bullish case. Last week, the 4th largest BTC whale bought a total of 988 coins. This happened two days after the bigshot bitcoin buyer bought 926 coins. It is quite possible that the buyer could be representing an institution. But the fact remains. Folks are buying the dip left, right, and center.
It coincided with the bitcoin price reclaiming the $40,000 level before a retreat towards $35,000. However, price trends show BTC hitting $42,000 in the coming weeks, as Posty, a Twitter-based crypto analyst, pointed out.
Analyst and educator Koroush AK believes that the recent rally is a good indicator. He, however, will stay bearish till BTC crosses the $45,000 price mark again.