Three Reasons Why Bitcoin [BTC] is Bullish in the Short-Term

Published July 20, 2020 | Updated July 20, 2020

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Three Reasons Why Bitcoin [BTC] is Bullish in the Short-Term

There is a lot of uncertainty in the markets right now. While Bitcoin and large-cap altcoins have been quiet for a while, the DeFi pumps and small altcoins pumps are reminiscent of the beginning of a bull run of 2017. The traders are apprehensive of another bubble built up. Nevertheless, there are still signals strong signals for bullish accumulation in it.

Bullish On-Chain Indicators

Miners account for a large portion of the sell-off in the market, the recovery in the hashrate is a hugely positive signal for the market. Moreover, according to Ki Young Ju, CEO of analytics firm, Crypto Quant, the outflow is suggesting a limited sell-off as well. He tweeted,

On-chain Indicators Status: BUY

– Miners are not selling (based on MPI, Miner Outflows)
– No significant
#BTCexchange inflows from whales so far
– All exchanges’ reserve hit the year-low a month ago and keep that low

outflow from mining pools
Outflow from Mining Pools (Source)

DeFi Pump Continues

The DeFi pump is still on as double-digit gains of popular DeFi tokens continues to rage on. The total market capitalization of these tokens is just south of $10 billion. While COMP and MKR tokens are underperforming, 2nd and 3rd tier projects like Aave (LEND), Sytheticx (SNX), Thorchain (RUNE) and so on are compiling gains.

lend and aave protocol
Lend/BTC and SNX/BTC Daily Chart (TradingView)

SpartanBlack (alias), a crypto analyst and partner at The Spartan Group tweeted,

As you go out the risk curve and look for the next DeFi star, this is the risk you need to weigh, and it needs to be priced in. Be wary of projects that over-promise and fail to deliver.

GOLD and SPX

The traditional markets are also in accumulation right now. SPX index is currently facing resistance for the break-down point of the COVID-19 crash at $3230. Moreover, gold made a new yearly high at $1820.6.

As for the bearish arguments, the resistance around the $10,000 level is still intact, with no sight of an uptrend in the global economic outlook. Moreover, Bitcoin [BTC] has already gained over 150% from lows after the COVID-19 crash, this reduces the apparent opportunity of inflows further. A break-out of the resistance around $10,500 will be significant for the bulls, while the long accumulation above $9000 is positive as well.

Do you think the crypto market is prepared for a new bull run? Please share your views with us. 

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Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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Nivesh Rustgi 1181 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com
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