The secret to a good sale lies in a good buy: Should you buy Bitcoin (BTC) at a relatively high price, while BTC continues to evolve into uncharted territory, reaching new ATHs?
Query the blockchain
January 7, 2021, Bitcoin beat his ATH again. Bitcoiners could either wait for a major correction to acquire BTC in order to be sure to make a profitable purchase, either buy a Bitcoin at its current price, based on forecasts of PlanB-ists which situate the price of Bitcoin to the level of 100,000 USD by the end of 2021 – this second strategy is in this case more suitable for HODlers than for traders.
For further technical analysis, the transparency offered by blockchain technology allows bitcoiners to check certain indicators before deciding to acquire Bitcoins.
Processing and extracting data from the blockchain, however, is relatively difficult for novices.
They can use the services of specialized websites to carry out this type of operation; it will then be up to them to properly interpret the extracted data.
On the trail of bulls and bears
The first indicator to check is the flow of stablecoins: a large flow to exchanges is a bullish signal. The increased flow means investors are ready to enter the markets.
The second indicator is the level of exchange reserves: its decrease indicates that investors are withdrawing their funds from exchanges, a phenomenon that generally occurs during a bull cycle.
The 3rd indicator is the flow of exchanges: if users make deposits in assets other than stablecoins, it may indicate that they are about to sell that asset or convert that asset. We must then anticipate a downward trend.
The release of a large volume of assets to be stored in cold wallets, however, heralds a future increase.
Beyond analyzing technical indicators, the decision to buy Bitcoins or not should be based on structural factors, especially for HODlers. The devaluation of the dollar in the medium and long term, the growing attractiveness of Bitcoin for institutional investors, the explosion in the adoption rate of BTC by retail investors thanks to PayPal’s crypto services, are all factors that play in favor of a sustainable rise in the price of BTC. Traders or HODlers BTC: it doesn’t matter! The losers will be the undecided ones who miss the opportunity to acquire BTC at a relatively low price before it hits 6 digits.
Litecoin, welcome in the Silver Age