After a two-month respite near its all-time high, bitcoin” target=”_blank” rel=”nofollow”>bitcoin (btc) seems ready to unleash another rampage, according to cryptanalyst Axel Adler. Adler predicts a 300-day bull run driven by healthy gains from short-term holders and a market that has a long way to go.
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Cost-effective punches and room for more
Adler throws down the gauntlet with data on the Short-Term Fork Spent Production Profit Ratio (STH SOPR). This metric reveals whether short-term holders are cashing in at a profit.
Currently, the 90-day moving average for STH SOPR stands at 1.015, indicating that short-term holders are in the green but have not reached the knockout levels seen in previous bull runs (around 1.06) . This suggests there is room for more profit-taking hits before the bulls tire.
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I have already mentioned that the bull market is in full swing. Barring unforeseen Black Swan events, it could last approximately another +/- 300 days.
This is based on the profit and loss analysis of short-term holders with a 90-day moving average. pic.twitter.com/30OgsruvOi
— Axel Adler Jr (@AxelAdlerJr) twitter.com/AxelAdlerJr/status/1792794395370205414?ref_src=twsrc%5Etfw” rel=”nofollow”>May 21, 2024
Open interest: the untapped reserve of strength
Another weapon in the bulls' arsenal is open interest (OI), a metric that reflects the total number of outstanding derivatives contracts (futures and options) held by traders.
While the recent price rise has been impressive, the OI 7-day moving average has not witnessed the dramatic rise seen in previous bull runs. This, according to Adler, means a hidden reserve of strength in the market, with more firepower waiting to be unleashed.
Technical Advantage: Bulls Have Momentum on Their Side
But technical analysis is not just about fancy ratios and cryptic charts. Adler identifies several technical indicators that paint a bullish picture. The Relative Strength Index (RSI), an indicator of momentum, has not risen above 70, a level often associated with overbought conditions.
This suggests that the current rally is healthy and sustainable. Furthermore, the Chaikin Money Flow (CMF) has surpassed the positive territory of 0.05, indicating a significant capital inflow and growing appetite for bitcoin among investors.
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Can the Bulls defeat the resistance levels?
While the bulls appear to have the upper hand, there are still hurdles to overcome. Key resistance levels sit at $79,000, $88,000 and $97,000, identified via Fibonacci extension levels. These prices could act as obstacles to the rise of bitcoin price.
However, if the current momentum continues, these resistance levels could be broken, paving the way for a possible retest of the all-time high $73,700 and a possible upward move beyond.
Featured image from Screen Rant, TradingView chart
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