Discussions about the next huge rally Bitcoin have surged significantly in the space this cycle due to increased market volatility recently. However, market experts are signaling that another bull run for BTC could be on the horizon, fueled by a number of key factors such as growing institutional interest and on-chain activity.
Is Bitcoin Preparing for Another Bull Market?
Despite the continued market declines, recent technical indicators point to the possibility that Bitcoin will soon see a major price rally as quoted by blockchain expert Tarekonchain in a recent study of the CryptoQuant platform.
In his research, Tarekonchain highlighted several recent events surrounding the flagship crypto asset that could serve as a catalyst for the expected bullish rally in the coming months. The first event highlighted by the on-chain analyst is the decline in Bitcoin’s exchange reserves.
According to Tarekonchain, stock exchanges BTC reserves have been steadily failing, which often precedes price increases. This decline indicates that investors are keeping their BTC in icy storage, reducing the amount available. Given that price peaks have typically followed such moves in the past, the analyst believes a similar situation could be occurring now.
Another indicator highlighted by Tarekonchain is the noticeable enhance stable coinBTC exchange reserves are rising as BTC exchange reserves are falling, meaning investors are getting ready to buy more BTC.
It is worth noting that the prevalence of stablecoins means that there is capital ready to be deployed, which indicates that traders are likely waiting for the right moment to enter the market. So this enhance in the reserve of exchange-traded stablecoins signals a high level of buying interest.
Supply and demand mismatch could trigger a breakout
Finally, the expert points out bull market configuration as a result of combining shrinking BTC reserves and increasing stablecoin reserves, which creates the foundation for price increases in the near future.
Tarekonchain believes the market is ready for a possible upside breakout because there are fewer bitcoins currently and purchasing power is increasing, indicating supply and demand imbalances that have resulted in significant price increases in the past.
So far the expert has insisted, investors be patient and watch for a potential price breakout in the coming weeks. “As supply tightens in the market and purchasing power increases, we could be on the verge of a price rally,” he added.
At the time of writing, BTC has been performing well with a rise of over 2% in the last 24 hours, trading at $58,045. Bulls seem to be betting on the digital asset recently as its market capitalization and trading volume are up 2.51% and 18% over the past day.
Featured image from Unsplash, chart from Tradingview.com
