Mining pools have their costs covered and accumulate BTC. BTC could hit $ 300,000 by December 2021, according to analysts.
According to renowned specialists like Willy Woo, Bitcoin would be at the edge of a bullish cycle due to reductions in the general supply of the cryptocurrency in the markets.
Analysts are currently considering a group of factors that could favor the increase in the price of BTC for the next few months, as these would be limiting the supply in contrast to a rise in demand.
These specialists also mention that the miners of the Bitcoin network would have already recovered their investments and would not need to put their BTC on sale to meet their expenses. Institutional investors would also study the adoption as a long-term strategy by withdrawing their BTC from exchanges to cold or hardware wallets.
Both analysts Willy Woo (independent) and Ariel Santos-Arbona (SeekingAlpha) agree on these aspects, according to reports published on Monday April 12, and Thursday, April 8, respectively.
Both specialists also agree that the price of BTC would go through a stable period with amounts circling USD 61,000 and, within the next 20 days, it would break this barrier reaching new all-time highs.
Santos-Arbona comments in his report that, during January, miners sold a large part of their BTC, which would have led to a 30% price correction. However, the trend has been reversed in recent months, consolidating the relationship between miners’ savings and the price of BTC.
Institutions and Whales Withdraw their BTC from Exchanges
Santos-Alborna, another specialist in terms of cryptocurrencies, points out that institutions and large individual savers (whales) are withdrawing their BTC from exchange houses rapidly.
According to this conclusion, the institutions would not want to be at risk of leaving their funds in exchange houses, where they could lose them due to malicious attacks or any similar incident. Instead, they are placing them in cold or hardware wallets. The analyst also concludes with the expectation of the bull market in BTC:
“The analysis indicates that Bitcoin is facing a double supply or liquidity shock. Miners are taking their BTC out of circulation now that they have covered their operational costs, while institutions are taking their BTC out of circulation by storing it in cold wallets. After this necessary period of consolidation, I expect the bull market to continue based on these liquidity shocks.”
Decentralized finance platforms (DeFi) probably reduced Bitcoin’s dominance in the general cryptocurrency market. However, this has not prevented Bitcoin (BTC) from holding onto the top spot of the market, breaking its all-time highs more frequently than before.
Willy Woo also said that miners are exceeding levels of profit. Profits are reaching superior levels to the ones in the 2017 bull market. When miners break their all-time profitability highs, the price of BTC consolidates firmly in a range that would form a mid-point to start a bull market. Through this perspective, the Bitcoin market would be ready for its second bull season of 2021.
By: Jenson Nuñez