4 chain metrics suggest that Bitcoin’s price increase may not stop at $16,000

Bitcoin’s price is defending the $15,000 support and chain data indicates that the rebound may exceed $16,000.

After rejecting the $15,960 on November 6, the price of Bitcoin (BTC) has been vigorously defending the $15,000 support level. Based on four points of chain data, analysts believe that the rally could continue beyond $16,000.

Analysts have pointed to a lower reserve of Bitcoin in the exchanges, an offer that remains unchanged, an increase in „stronger hands“ and unrealised profits as factors for the rally to continue.

According to Coinmarketcap, Bitcoin’s market capitalisation is currently $286,937,402,262.

The number of BTCs in the exchanges has fallen

Recently, Delphi Digital, an independent cryptomontage research and consultancy company, published a report on the prospects for the Bitcoin market.

Paul Burlage, an analyst at Delphi, said that chain metrics generally show good momentum for the price of Bitcoin.

Since February 11, Bitcoin’s foreign exchange reserves fell from 2.96 million to 2.41 million. In dollar terms, a drop of 550,000 BTC is equivalent to $6.36 billion.

The fall in Bitcoin’s foreign exchange reserves is an optimistic development because it means that fewer sellers are depositing BTCs in the exchanges. Burlage said:

„On 11 February 2020, BTC on exchanges reached an all-time high of about $2.96 million. At the time of writing, $BTC on exchanges is at approx. This current trend has seen a divergence between the availability and price of Bitcoin, suggesting a more sustainable upward movement for $BTC“.

BTC supply peaks with no movement

While fewer sellers have been moving their funds to the exchanges, BTC’s immovable supply remains high.

On September 9, Burlage explained that the percentage of Bitcoin Bonanza Scam  unmoved offer reached a historic high of 63.5%. Since then, it has decreased slightly to 62%, but considering that the price has increased substantially, this is a positive measure. He said:

„We have seen a slight decrease in the percentage of supply that has not moved in the last year during the last week. After reaching an all-time high of nearly 63.5% of the supply not moved on September 9, we are now close to 62.0%.“

This shows that investors are increasing Bitcoin’s „HODLing“, despite the recent rally and are not taking big profits yet.

There are still no clear signs of a cap

The number of „weak hands“ or speculative buyers has decreased significantly in recent weeks, while stronger hands have increased.

The exit of short term buyers and the entry of long term „HODLers“ indicate that Bitcoin could be in for a prolonged rebound.

This trend coincides with Bitcoin’s resistance above $15,000 and shows that the previously very strong resistance level is close to becoming a support zone. Burlage noted that:

„Although the local highs for ‚weak hands‘ are tending to fall, we cannot confirm that the recent speculative base rise has formed a cap. That said, the increased trend suggests that the stronger hands are populating the short-term bands rather than the speculators“.

Bitcoin’s unrealised gains indicate that the rally may continue

In July 2019, the price of Bitcoin reached a peak of about $14,000. At that time, Glassnode’s technical director, Rafael Schultze-Kraft, said that Bitcoin’s Relative Unrealised Profit reached 0.64.

Currently, even though the price of Bitcoin is above $15,000, the Relative Unrealised Profit is 0.53. This shows that BTC has the potential to see a wider rebound before a major setback.