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3 Reasons Bitcoin’s ATH Looks More Bullish Now Than in April 2021

It’s been a wild few months for Bitcoin’s worth. It went all the best way up from round $65K in April, down to under $30K in July, and again to a brand new all-time excessive immediately – October twentieth.

Many are drawing comparisons between the market dynamics in April and now, and as BTC sits in worth discovery, it’s price a couple of causes for which issues could be much more bullish at the moment in contrast to earlier than.

Retail FOMO Is Not Here

First issues first, one of many important catalysts of parabolic advances in the BTC worth have all the time been swarms of retail merchants dashing in to purchase bitcoin on the final hour.

This is what’s generally referred to as “retail FOMO,” and we’ve seen it in 2017 and in April this yr – knowledge from Google Trends helps it:

btc_trends_google
Chart by Google Trends

The above chart from the previous 5 years exhibits that again in December 2017, when Bitcoin peaked at round $20K, searches for the cryptocurrency reached an all-time excessive. They additionally began to enhance in April this yr – when BTC marked its new all-time excessive just under $65K.

Now, nonetheless, there are no actual indicators that retail traders are in the market. This signifies that we are nowhere close to the degrees of precise FOMO, inflicting many to imagine that there’s loads of upside to come.

The Market is Not Overleveraged

One means to evaluate how overleveraged the market was in April in contrast to now is to check out the long-term holders SOPR ratio, which exhibits when they had been distributing cash.

long-term-holder-sopr-lt-oct20
Chart by CryptoQuant

The above chart reveals that again in April, LTH had been taking earnings at a mean of an 8X leverage, and now they’re doing so at a mean of 3X leverage – a substantial discount.

Another means to gauge this is by the general price of liquidated positions.

Back on April 18th, CryptoPotato reported that the full market cap misplaced about $360 billion in a matter of hours, and bitcoin’s worth crashed by $9,000. This induced a historic liquidation occasion the place over $10 billion price of each lengthy and quick positions had been wiped off the market.

Now, comparable issues occurred in September amid the brand new wave of China FUD when BTC dropped from $52K to $42K very sharply. However, the liquidations again then had been nowhere close to the degrees from April.

In April, we had been used to seeing multi-billion {dollars} price of liquidations daily as each bulls and bears had been overleveraged – one thing that would even have been deduced by the very excessive funding charges.

Now, on the day that Bitcoin broke its all-time excessive and has been by way of huge volatility over the previous 24 hours, there are solely about $300 million price of liquidations.

This additionally signifies that the opportunity of a significant squeeze is significantly smaller as fewer merchants are utilizing leverage.

Strong Fundamentals

It’s true that Bitcoin’s fundamentals have been strengthening all through 2021 in normal, however the rally in April was propelled by an occasion that may not be as significant as many put it out to be – Tesla’s involvement in the market.

Now, nonetheless, issues are notably completely different, Institutional traders proceed to flock to the trade. Not solely this, we simply noticed the approval of the very first futures-backed BTC ETF in the United States ticked BITO.

It’s one of many hottest merchandise on Wall Street, at some point into buying and selling, producing billions in quantity and hauling over half a billion {dollars} in belongings.

It outperforms different main ETFs such because the VOO by an order of magnitude in phrases of the buying and selling quantity.

This has considerably legitimized the market and opened the door to extra conventional traders because it offers a regulated product they can reap the benefits of.

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