Bitcoin’s price fell from its multi-year high of $14,100, but there are five signs that the real bullish run is about to begin.
The price of Bitcoin (BTC) dropped substantially from its annual high of $14,149 a few days ago. However, there are five signs that the real rally is just beginning.
The increase in HODLing activity, record fundamentals, low retail interest, the greater breakout of the time frame and technical indicators suggest that a major bullish run may be in the making.
Breakdown of the upper time frame
Bitcoin has fallen more than 6% from its local high to over $14,000, a level it hasn’t tested since 2017.
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But in the weekly and monthly time periods, it registered a clear break. He saw the first weekly and monthly candle close above $13,000 for the first time in nearly three years.
Bitcoin’s weekly price chart.
As Cointelegraph reported earlier, the monthly graph shows that Bitcoin is well above key moving averages. Technically, that means the momentum is still intact, but a healthy setback could be beneficial.
Google Trends Social Activity and Volume Still Low
During the peak of a bull run, Google Trends activity for the keyword „Bitcoin“ soars as retail demand floods in. When market sentiment becomes euphoric, the whales tend to make profits, causing the market to decline.
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In the last few months, despite Bitcoin’s strong rebound, Google Trends activity has been low. This indicates that not many retail investors are looking at Google’s dominant crypto currency.
Also, according to data from The Tie, Bitcoin’s monthly tweet volume in October only increased by 7.8 percent. The lack of retail interest despite the price being at multi-year highs indicates that BTC could be in an early stage of a bullish market.
Volume of tweets about Bitcoin since 2018 Source: The Tie
Technical indicators show that the rally is not overheated
According to Mayer Multiple, Bitcoin’s historical price cycles show that the current BTC rally is not overheated.
Mayer Multiple analyzes Bitcoin’s price based on its 200-day moving average, which assesses its long-term price trend. If the multiple is above 2.4, it indicates that the rally is likely to be overheated. In 2017, when BTC reached $20,000, for example, the multiple increased to about 3.8.
Currently, as of November 2, the indicator is around 1.27. This shows that the rally is not overheated or overcrowded, despite BTC’s upward trend from $3,600 to $13,350 since March.
The hash rate is still close to a record
During the fall, the northern areas of China experience the rainy season. Major mining centers that depend on hydropower can gain access to cheaper electricity, allowing them to mine Bitcoin more efficiently.
When the rainy season ended, there was a mass exodus of miners in northern China. As a result, Bitcoin’s hash rate dropped sharply in a short period.
However, the average 30-day hash rate over the past year shows that the Bitcoin hash rate is still close to its record. Currently, it’s around 132 million terahashes per second (TH/s). In January 2020, the hash rate was well below 100 million TH/s, by comparison.
HODLing activity remains strong
According to HODL waves, which have been evaluating the trend of Bitcoin holders for a long time, more and more investors are maintaining BTC for longer periods.
HODLing activity has increased since March, when the BTC price briefly fell below $3,600. Since then, investors have been accumulating BTC steadily.