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Bitcoin Price Reasons to be on the Edge of Another Uptrend

Bitcoin (BTC) price has gained as much as 170% for the past three months. It has risen from $3,600 to $9,700. Even with this enormous three-month recovery, a series of fundamental factors hinted a chance of another uptrend in the near-term.

Now, there are some reasons why Bitcoin is likely to show an upsurge. And these are the improving exchange outflow, miner revenue finding support, and the increasing number of so-called ‘hodlers’ or investors holding BTC for lengthy periods.

 

Compelling Factors

After the outflow of Bitcoin from exchanges boosted, it indicates that investors are gearing up to hold BTC for the long term.

Usually, exchange users withdraw Bitcoin aiming to send the BTC to a personal wallet. Then, this trend typically means that users have a fewer appetite to trade Bitcoin in the foreseeable future.

The fall in Bitcoin exchange outflow corresponds with the recovery of miner revenue. At the same time, miners produce more BTC through mining in the aftermath of the recent hashrate difficulty adjusted. While existing miners are getting more profitable.

In case the operational costs to mine Bitcoin drop, the need to sell more BTC in the short-term for major mining centers might also decrease. Aside from that, it is also likely that the outflow of BTC is somehow coming from miners.

In addition to that, verifiable on-chain data displays that miners sold less Bitcoin compared to what they mined in the previous week. For the past seven days, miners mined approximately 6,694 BTC. Then, data shows they sold at least 6,384 BTC, netting a positive inventory of 310 BTC.

Moreover, Byzantine General, a cryptocurrency trader, noted, “Exchange outflow keeps going up. Miner revenue is finding support. Miners are holding more and more. So, even if the chart doesn’t look very exciting, I wonder where bears think the big sell pressure is gonna come from.”

Above all, miners have been moving less Bitcoin and putting less selling pressure on the spot price. With the combination of fewer sellers in the Bitcoin market and a regular rise in long-term holders, it increases the possibility of a continued rally.

 

Spoiling BTC Uptrend

Moreover, the prediction of a new phase upward momentum for Bitcoin in the near-term is initially based on the suspicion that miners will not sell a lot of BTC in the coming months. However, sharp changes in BTC price and the challenging mining of BTC might be a reason for a trend change.

In the third quarter of 2020, to achieve an excellent scenario for a powerful rally, the price of Bitcoin must remain stable over $10,000. Also, it would require that the amount of BTC sold by miners on a daily basis further declines.

In case this actually happens, it would signal that the price of Bitcoin broke out of a multi-year resistance. And this is with developing the confidence of both investors and miners, creating a proper long-term bull market possible.

Meanwhile, several analysts are saying that Bitcoin could double to as high as $20,000 before the year-end, going back to its 2017 all-time high.



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