Bullish trend reversal underway as Bitcoin price holds above $11,000
Within the last few hours, Bitcoin (BTC) price surpassed $11,000 in a swift turnaround from its swing low at $10,500 in early October. Analysts have attributed three major factors to BTC’s abrupt trend reversal.
The potential catalysts are whale accumulation, a spike in institutional demand and the strength of the $10,500 support.
Whales are either accumulating or refusing to sell
Data from Whalemap shows that whales have likely been buying Bitcoin from $10,370 onwards, and on Oct. 8, the analysts said that the $10,570 support held. This indicates that whales bought substantial amounts of Bitcoin in the $10,407 and $10,570 range.
Since whales typically account for a large portion of the buying demand and selling pressure in the Bitcoin market, whale accumulation is a significant catalyst.
Institutional demand is rising due to high-profile bulk Bitcoin investments
In the past two months alone, two multibillion-dollar conglomerates made public bulk purchases of Bitcoin.
First, MicroStrategy disclosed that it had bought $250 million worth of Bitcoin on Aug. 11. Then it followed up with another statement revealing that it purchased an additional $175 million worth BTC.
“It is a major development that a global corporation is now putting $BTC onto its balance sheet. The weekly and daily charts are poised to flash a big buy signal.”
The daily volume on institution-tailored Bitcoin exchanges, including LMAX Digital and Bakkt, has continuously surged since August.
On top of favorable fundamental factors such as whale accumulation and a rising hash rate, the growth in institutional appetite for BTC is adding extra energy to the momentum seen in Bitcoin’s price.
The $10,500 support continues to hold
The $10,500 area has been a crucial support level for Bitcoin over the past three months. It has significant historical relevance and has acted as a pivotal level for short-term price cycles.
Technically, holding the $10,500 support level is crucial in sustaining a Bitcoin uptrend. The level represents the July 2019 peak, and it indicates that BTC is using its previous peak to continue recovering to new highs.
Ki Young Ju, CEO of on-chain analytics provider CryptoQuant, said that exchanges’ netflow has declined to a one-year-low.
Typically, sellers deposit Bitcoin on exchanges in order to sell the dominant cryptocurrency. Hence, when there is a lacking reserve of BTC on trading platforms, it means lower selling pressure.