Bitcoin (BTC)It seems that it will have difficulty in sustaining the strong rally that it started in the second half of March from today. Despite this, an important indicator of retail interest gives hints that BTC could rise further.
Bitcoin is trading around $46,000 after posting a 17% rise over the past 30 days. Bitcoin is currently trading pretty close to 2022 highs but still 31% off from its highs.
“Weak Hands” Points Strong Rise for Bitcoin (BTC)
Twitter commentator @0xCryptoChannoted that the ratio of inactive BTCs on the chain to total BTC circulation is at record lows. The ratio is called the weak hands indicator and indicates the level of retail interest in the market, which is currently at record lows below 25%.
However, the rate reaching 25% again has always heralded an important rally in BTC. The last time such an event occurred, the price of Bitcoin increased 11.3 times from the end of 2019 to 2021. The period before that, the rate of BTC increased 59.6 times from the beginning of 2016 to 2018. Weak hands are now ready to go over 25% and this could trigger another rally.
Weak hands are retail investors who hesitate to trade because of their limited liquidity. Such traders are often the last to enter a bull run and escape a bear market. bitcoinAssuming that rallied throughout March, April may present an opportunity for such traders to enter the next bull run.
“Without any significant development in the cryptocurrency sector, Bitcoin is again working as an indicator of the global demand for risky assets. However, it will be possible to speak with confidence about the local victory of the bulls only after BTC/USD climbs above the 200-day moving average, currently located at $48,300.
—Alex Kuptsikevich, Senior Financial Analyst at FxPro.”
Institutional Interest Driving the Bitcoin (BTC) Rally
The weak hands ratio also highlights an important aspect of BTC trading; this is because large institutions make up most of their volume. The trend rose in 2021 and was a major factor in BTC’s run to record highs.
Recent data also BTCIt showed that over 90% of daily transactions have been consistently above $100,000 since 2020 – an important indicator of large-scale trading in Bitcoin.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.