Four Factors that Suggest Bitcoin Price Appreciation Until 2021

Bitcoin has fared quite well among all cryptocurrencies that are currently available. It is partially because the cryptocurrency was the earliest one to hit the blockchain and reap the rewards for it. At the same time, it also saw massive depreciation due to the same reason, but over the last ten years, it has managed to become stable because, after May 2020, it has hardly fallen below the $8K mark. After April 2020, it has experienced a steady rise that has helped a lot of investors to put in their money on the cryptocurrency.

Reliable sites have also pointed towards this fact and even go as far as to conclude that the bull run of the digital currency is set to continue at least till 2021. To substantiate the claim, four factors are put forward, and they do look convincing enough. However, it is important to go through them, and in the following sections, we share these factors accordingly. Keep reading and you will know the future of cryptocurrencies

There is heavy accumulation

Data reveals that there is a massive accumulation of the cryptocurrency due to an upbeat mood for Bitcoin. It states that a whopping 61% of investors have not moved Bitcoin supply for more than a year. Additionally, 44% has not moved within the last two years and 30% for three years. It simply shows the market confidence in the digital currency that has helped it in appreciating its value significantly. This has been determined from a metric known as the “HODLer Net Position Change,” and whenever HODL activity has increased, that has always coincided with a bull run for the BTC.

Interest from institutional investors

After March 2020, there has been considerable interest in BTC among institutional investors. It simply goes on to show a high level of confidence among the investors for BTC than they did have at least three years back. It can be called a very good and healthy sign for the virtual currency as more trust and reliability can be developed among small investors. If small investors also show the same level of confidence, that can work wonders for BTC, and it seems that the mood is positive amongst them.

Positive technical structure

As per industry sources, the last six-month Bitcoin chart shows that the cryptocurrency is preparing to hit the Green 1, or G1, candle. It is a feature from the Tom Denmark Sequential Indicator system. The sources further say that every time that it has hit the G1, BTC experienced bull-run for an extended period. Hence, the G1 can be regarded as the beginning of an upward trend. Moreover, the market has not been overbought by investors. Hence, there is a favorable environment t that can certainly help in its price appreciation.

Rising hash rate has come as a boon

Before the Bitcoin halving event in May, it was anticipated that the hash rate might fall sharply after the event as BTC mining reduced by half, and therefore the returns of miners also decreased by almost 50%. But fortunately enough, that exactly didn’t happen after the event. The mining centers of China remain profitable after Bitcoin halving. It can be largely attributed to the rainy season during the time because the price of cheap electricity may have offset the event. Therefore, miners may not have sold their ‘rewards’ easily and have held on to them so that the hash rate may have risen significantly.

All these factors may have a bearing on the price of Bitcoin in 2020, and more importantly, these factors can help in appreciating the price of the cryptocurrency significantly. That is why many industry insiders and seasoned observers feel that the price of Bitcoin is only set to rise further during 2020. To some extent, these explanations seem plausible as there are at least three technical reasons that justify the claim. However, at the same time, it is also important to observe the BTC market closely during the year so that the changeover points can be identified with proper reasoning. If it enjoys further appreciation, then it can be said with surety that these factors do make a difference in how BTC behaves and making future projections can be a bit easier for any investor.

Feature Image by Gerd Altmann from Pixabay