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What indicators does Bitcoin rely on (What supports Bitcoin prices)

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What indicators does Bitcoin rely on? Can it be used as a basis for price chang

What indicators does Bitcoin rely on (What supports Bitcoin prices)

What indicators does Bitcoin rely on? Can it be used as a basis for price changes or as a reference? Let’s take a look.

According to Glassnode data, as of the week ending April 18, 2020, the price of BTC was around $9,400, an increase of over 20% from the beginning of the year (since May 2019). In addition, in the past week, the price of BTC has fallen over 60% from its high point of $19,000.

On the other hand, as the market gradually matures and the development of the cryptocurrency field, people are also starting to pay attention to the increase in its usage and more and more people are becoming interested in this emerging asset class. However, recently, several traders have found that the connection between these two types of digital assets is becoming closer, so they have raised some interesting questions: If these questions are not resolved, will Bitcoin continue to grow?

In fact, we can see that although the inflow of Bitcoin into several large exchanges has recently decreased, it still accounts for a large proportion, including major exchanges such as Bitfinex, Binance, and Kraken. At the same time, due to the fact that many investors on these exchanges have bought or sold their Bitcoins, some funds have been transferred to other exchanges in search of profits.

In addition, since most traders’ activities are conducted on exchanges, this situation may continue for a while. However, Bitcoin is still currently at a relatively high position, even far above its peak in 2017. (Note: Bitcoin is mined by miners, not physically stored.)

What supports Bitcoin prices

Bitcoin has been attracting attention since its birth, but there are still many doubts about whether its price can continue to remain stable. The price support of Bitcoin is mainly determined by three factors: market demand, supply and demand relationship. Currently, the upper limit of cryptocurrency supply is 21 million coins. If these three assets are compared, the market value of Bitcoin is equivalent to twice the market value of gold.

Looking at the chart, when the price of Bitcoin surpasses $12,000, the indicator “BTC=$10,000” is also confirmed as a “strong support”; Conversely, it indicates that BTC has been continuously declining in the past few weeks. Therefore, we believe that whether the price of Bitcoin can consistently maintain this state remains to be observed.

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