Bitcoin Breaks $21k, Crypto Market Poised for Bull Run
• Bitcoin has been strengthening above $20k and is now above $21k, signaling a potentially bullish sentiment in the crypto market.
• Sellers are exhausted, with over 80% of Bitcoin being held by long term holders, and many short sellers having been punished for their bearish bets.
• The depressed value of risk on assets such as the stock market has increased the likelihood of a Fed pivot, which could further benefit the crypto market.
The crypto market has been in a lull for over a year now, with the Bitcoin price falling from the highs of $69k to lows of $15k and the rest of the market following suit. However, there finally appears to be some bullish sentiment, as the Bitcoin price has been strengthening above the $20k threshold and managed to break above $21k. This is an extremely bullish threshold to have overcome, and this could signal that the market has bottomed out and will begin to consolidate and appreciate from here.
The bullish sentiment is further reinforced by the exhaustion of sellers, as many traders and speculators have been punished for their myopia, leaving only long-term holders who are more resistant to the volatility in prices. On-chain analytics have revealed that over 80% of Bitcoin is now held by these long-term holders, making it thanks to the other 20% that the price oscillates so much. This has also been reflected in the liquidations of short-sellers, who have been struggling as their bearish bets have been heavily punished.
The macroeconomic situation of falling inflation and the increased likelihood of a Fed pivot due to the depressed value of risk on assets such as the stock market have all contributed to this bullish sentiment. This Fed pivot could further benefit the crypto market, as the government could potentially inject capital into the market and support the bullish sentiment.
New presales for 2022 are also on the horizon, and many believe that this could be the start of a new bull run. All of these factors combined suggest that the crypto market is in for a strong week ahead, and it will be interesting to see how Bitcoin and other alt coins respond to these developments.