What is the 33% fear of a callback? These three reasons make cryptocurrency analysts continue to be optimistic

As Bitcoin fell another 8% on Saturday, opponents claimed that Bitcoin’s record high has ended. So, in the face of the 33% callback, what makes market analysts optimistic?

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Bitcoin price bearers with $10,000 as the bottom line

The recent price movements in Bitcoin are not satisfactory unless you are a bearer. So far, this top-level digital asset has fallen 32% from the high of $13,739 in 2019, and short-term price movements remain extremely pessimistic.

In the past two weeks, Bitcoin has formed an M-top for $13,739 and $13,177, and then fell to the $9,600 collar. Most traders expect Bitcoin to fall back to 61.8% and 50% Fibonacci retracements, as well as the Chicago Mercantile Exchange (CME) futures spread. Traders may think that the factors surrounding the Chicago Mercantile Exchange (CME) spread are playing a role in magnets, pulling the price of BTC to the $8,500 – $7,500 range.

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Traders will also notice that Bitcoin has moved away from the ever-expanding wedge that pushed it from $4,000 to a 2019 high, and the parabolic trend has long been denied, so it is possible to return to the 61.8 Fib retracement.

Therefore, the short-term outlook is pessimistic. However, several analysts in the industry are still extremely optimistic about the long-term price movements of Bitcoin. Let's take a look at some of the key factors that influence their views.

Sleeping bitcoin wallet address hits record high

Earlier this week, a report by Coin Metrics showed that Bitcoin's unmoved supply reached a record high of 21%.

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Bitcoin has not moved

In the past five years, the number of unmoved bitcoins has increased significantly, and bitcoins belonging to this category have been stored for 180 days to 2 years in the same wallet address. This shows that bitcoin is increasingly becoming a means of value storage, not a trading medium. One can assume that if the price of Bitcoin continues to rise, then the number of bitcoins that are not moving will continue to rise.

However, not everyone supports this conclusion. Tuant Demeester, founding partner of Adamant Capital, retorted:

"I'm not sure… In the field of Bitcoin, it's been a long time not to update your cold storage method for 5 years. In my opinion, most of these coins may be lost."

Although Demeester may be right, a closer look at the Coin Metrics chart reveals a significant increase in the number of unmoved coins in the 1800-day and 1-year timeframes compared to the longer-term frame. This increase is also consistent with the price increase of Bitcoin in dollar terms.

Finally, the report gives a correlation between the rise in bitcoin prices and the number of wallet addresses for digital assets used as a means of value storage.

The data shows that miners are on the verge of a new bull market

On Saturday, cryptanalyst expert PlanB posted a rather interesting chart on Twitter, which he co-produced with ParabolicTrav.

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Bitcoin bull market starts at the tough bottom

According to these analysts, after the price of Bitcoin against the US dollar peaked, a large amount of Bitcoin appeared at a lower price. The beginning of Bitcoin's new bull market coincides with the surrender of miners, and bitcoin prices tend to rise 100 times from the bottom.

According to PlanB:

“We saw the bottom of the difficulty (miners surrendered) in December 2011 ($4.6), May 2015 ($230) and December 2018 ($3,896). Prices continued to rise from these bottoms until about 100 Times ATH (historical new high)… means continuing to rise until 370,000 US dollars ATH."

Further investigations into the chart show that the increase in bitcoin prices has been declining every time, and the approximate interpretation of the chart shows that the current bullish trend can reach as high as 1000%.

Cointelegraph sought further explanation from PlanB, and PlanB explained:

“This may be a sign that the bitcoin market is mature and volatility is lower. Compared with 2010-2011, more money is needed to drive the market. Or it may be 100 times because the bitcoin market is a nonlinear power. Law, distributed with black swan (instead of outliers)."

Bitcoin's current price action seems to be in line with the previous cycle, which has risen by 300% since it bottomed out in February.

The hype before halving may push Bitcoin to $20,000

A few weeks ago, popular cryptographer Filb Filb came to the same conclusion. He is convinced that bitcoin prices will not return to the low of $3,120 in 2019, despite the current adjustments.

Filb explained:

“Every time Bitcoin’s earnings are higher than mining costs, miners will sell according to market demand. He expects miners to “limit sales” as new halving bubbles are triggered as the halving event approaches.”

In short, the basic rules of supply and demand determine the price of Bitcoin, Filb Filb believes,

“What happened in 2018 was that miners sold bitcoin at marginal cost.”

He added:

“Only the most efficient miners survived, and those inefficient competitors were eliminated.”

Similar to PlanB and Parabolic Trav, Filb Filb also believes that miners are still holding newly mined bitcoins while waiting for halving bitcoins in 2020.

If the group of cryptanaps are correct, then as bitcoin prices rise in the near future, we should start to see miners selling fewer bitcoins. As the buying pressure decreases, the sell-off will resume.

As for the future bitcoin price, three analysts believe that the bitcoin exchange rate against the US dollar will follow the overall trend of short-term integration, and then halving the speculation will bring the bitcoin price back to $20,000.

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Filb Filb's 12-month forecast

If Bitcoin does test its historically highest price, it is entirely possible for a person holding Bitcoin for a long time to buy Bitcoin at around $16,000 in Bitcoin's ATH high and then sell it.

Of course, all of this depends on the technical settings of digital assets as they approach these highs. From a technical point of view, the most likely scenario is that the currency price continues to fall to $7,500. After that, as bitcoin re-accumulates and daily price volatility tightens, the market will go through a long period of consolidation.

But as people's enthusiasm for halving by 2020 is rising, most analysts expect miners and investors to continue to hold the money in their hands. With the anticipated influx of retail investors and the launch of institutional investment services such as Bakkt, TD Ameritrade and Fidelity Investments, the market is set to record a record high.