The price of the pioneering cryptocurrency could be starting fresh momentum due to a shortage of coins in circulation. The current correction will not prevent the pullback from bottoming out to make way for a new drive.
At the beginning of October, the price of Bitcoin increased significantly but is now retreating slightly. Analyzing the cryptocurrency allows knowing where its value is going in the second week of the month.
Bitcoin is trading at around USD 49,470 and has accumulated a 3.5% profit in the last 24 hours, according to CoinGecko.
It seems that everything will be fine as the fundamentals become increasingly optimistic as the price rises.
The rise in the hash rate is one of the most relevant fundamentals when it comes to the price of Bitcoin. Although many Chinese miners left the Asian country five months ago, that metric is about to reach a new all-time high.
That shows that the network can be strong even though restrictions hamper mining activity in China. The Asian nation is one of those with the highest hash rate.
The Divergence Between the Price and Liquidity of BTC Announces Momentum
The supply has continually declined as holders continue to accumulate with their sights in the long term.
An analysis by Will Clemente indicates that the divergence between the price and liquidity of BTC announced the beginning of momentum.
The major correction started in April after the price of BTC hit an all-time high of almost USD 65,000. After large coin deposits by exchange users, the price fell to USD 28,130.
The metrics indicated that the shortage of coins in circulation was starting to increase even though the price did not. However, a strong supply shock caused a rapid rise in value that was not long in coming.
After another divergence that occurred recently, the price is starting to react to the shortage of coins.
An Analysis Reveals that There Could Be a Bullish Trend in the Short Term
The short-term trend is clearly bullish, as the 8-day EMA and 18-day SMA crossed to the upside. The moving average that follows the higher trend (200-day SMA) also turned bullish.
On October 1st, a resistance at USD 48,121 hampered the price of Bitcoin, and a correction is now in the works. However, the pullback will most likely bottom out this week, ushering in new momentum.
The next resistance for the price of Bitcoin is at USD 52,663, but that hurdle may not be relevant.
The Larger Trend Should Lead the Price of BTC Higher
The weekly chart reveals that the gains for the first week of October signal the start of stronger momentum. That could quickly push the price of Bitcoin towards the resistance left by the all-time high.
The gains in the last two months resulted from the resumption of the trend generated by the considerable increase throughout 2020 and early 2021. For that reason, thinking about new highs far away from the current point does not seem far-fetched at all.
By Alexander Salazar