3 Charts Reveal Perfect Storm for Thunderous Bitcoin Rally

Journalist:
Ben Brown
September 4, 2019

Too many people focus on bitcoin’s wild highs and fluctuating daily price. A better metric to look at is the monthly low points.

By tracking the lows, you see the steady accumulation of bitcoin. This is the foundation of the market and it’s getting stronger.

The chart below tracks the bitcoin price, overlayed with a red line marking the monthly low point. It’s a steady, upward curve of monster accumulation.

Ignore the volatile tops and bitcoin is carving out a strong, steady trend with its monthly lows. Source: Yahoo Finance / CCN

Bitcoin monthly lows indicate strong bull market

As bitcoin investor Misir Mahmudov explains, this gradual curve indicates a stable, growing foundation for the next bull run.

“Bitcoin 2019 monthly lows show how strong this bull will be. This isn’t a few months of 2017 gamble mania anymore. This is a store of value in the making. This is just the beginning.”

By tracking bitcoin’s low points, we remove the mania and hype and reduce the noise from short-term traders. Instead we see the steady underlying growth of the market.

Bitcoin yearly lows paint the same picture

Let’s zoom out even further. The annual lows track a similar, gradual curve. Director of business development at Kraken, Dan Hedl recently tracked bitcoin’s yearly low points as you can see below.

He explains that the growing number of ‘hodlers’ are the floor of the market. Every year it grows deeper and wider, forming a stronger base.

Accumulation phase almost complete

As trader Josh Rager explained recently, BTC is still in an accumulation phase after the long run-up to $14,000.

This chimes with CoinMetrics data which revealed that a record number of bitcoin addresses are holding for the long-term. The over-riding trend here is accumulation and long-term hodling. In other words, a stronger foundation for a monster rally.

The number of bitcoin addresses that remain untouched over the long-term is steadily increasing. In other words, more and more bitcoiners are hodling for the long-term. Source: CoinMetrics

Yet more data from CoinMetrics revealed that most of the bitcoin bought above $13,000 has now been sold. Again, it means bitcoin’s price foundation is now much stronger and there’s less selling pressure above.

The majority of bitcoin bought above $13,000 has now been sold, meaning there’s less selling pressure from above. Meanwhile, there’s strong accumulation happening around today’s price of $10,000. Source: CoinMetrics.

“Capitulation is most likely almost complete, since a majority of coins that were bought above $13,000 have now been sold. A relatively large amount of BTC ownership is now concentrated in the $3,000 to $12,000 range, which is setting up for a healthier base.”

These three charts show strong and steady bitcoin accumulation over the long-term. It’s a pattern of building strength ahead of a major breakout. Ignore the noise and daily price hype and focus on the bigger picture.

Ben Brown

Ben is a journalist with a decade of experience covering financial markets. Based in London, UK, his writing has appeared in The Huffington Post and he was Chief Editor at Block Explorer, the world's longest-running source of Blockchain data. Reach him at benjamin-brown.uk or on Twitter at _Ben_Brown. Email ben @ benjamin-brown.uk.