Bitcoin’s bull rally is not stopping. Those who thought that April of this year had marked the top of this market cycle, have seen their thesis disproved twice in less than a month: first, on October 20 with USD 67,118; and today with a new high of $68,641.
Yesterday in Criptoreportage we commented on four factors that would affect the price action today. On the one hand, there was the fall in real bonds of -1.09% in the last ten years, the galloping world inflation, the growth of financing rates and the activity of large investors.
Also the data of the activity in the Bitcoin network gives us clues of what happens in the markets. For example, at this moment a great supply shock is evident, since the balance of bitcoin in the exchanges is at its lowest point since August 2018 , with less than two and a half million bitcoins available. This despite the fact that, over the past two years, more than 1,600,000 units of BTC have been issued.
That fewer and fewer bitcoins are available for purchase becomes more apparent when looking at the relationship between deposits and withdrawals from exchanges today, compared to the bull market of 2017.
In the following graph we see, in green, deposits in exchanges, and in red, withdrawals to personal wallets. Unlike the rally of 2017, much more speculated by retail traders, during this market cycle the trend has leaned much more insistently towards withdrawals than deposits.
This suggests, on the one hand, that investors increasingly want to treasure their bitcoins in the long term, and, on the other hand, that they are still confident that the top of the cycle has not been reached, at which point they could take profits.
This tendency to accumulation, which has been previously reported in Criptoreportage, when combined with a growing demand as a form of hedging in the face of the unstable macroeconomic climate, inevitably leads to a price increase. This seems to show that, among bitcoin investors, there is a certainty that this market cycle has not yet reached its maximum.
Going forward, the next challenge will be to overcome the psychological barrier of USD 70,000, which, under current conditions, does not seem too difficult a challenge.