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Despite numerous bearish signals, red flags, and price weakness in the Bitcoin chart, the largest cryptocurrency by market cap has refused to retrace or crash instead, it has continued surging higher against all logical explanations.
The bullish move in the Bitcoin price has the price of the cryptocurrency back to the $18k region and the momentum does not look like it will be slowing down any time soon.
But what exactly is driving this rally and how long can we expect this bullish trend to continue?
Institutional Investing, A Game Changer For Bitcoin
According to recent research from on-chain analysis, one of the main factors driving this 2020 Bitcoin rally is scarcity and shortage in the supply of Bitcoin.
The research stated that Bitcoin’s price is rising because the demand for it is increasing at a time when there are relatively few of them available to buy.
Coinmarketcap
And the main reason for this shortage in the supply of Bitcoin is the massive inflow of new money into the cryptocurrency market. This massive buying power from institutional investors, international cooperations, and billionaires has increased the demand for the limited Bitcoin available in the market.
With more money chasing fewer Bitcoin, the demand has outweighed the supply, pushing the Bitcoin price higher. And the reality of this matter is that we expect this demand to keep on growing especially at this point in time we are seeing hyperinflation, low-interest rates, and economic stagnation worldwide.
Hodlers Not Ready To Sell
Another major factor pushing the Bitcoin price higher is the increasing number of hodlers.
According to research, BTC is much more illiquid today than it was in 2017. And the main reason for this is because long term investors do not want to sell their holdings.
About 77% of the total amount of Bitcoin (14.8 million Bitcoin) that has been mined so far is currently held has long term investments in offline Bitcoin wallets and vaults.
That leaves a pool of just 3.4 million Bitcoin readily available to buyers.
And with big players coming into the crypto market, the demand for this 3.4 million Bitcoin will only increase, pushing the price higher and making it more expensive to own.
These are the few reasons that might have caused the Bitcoin price to recover back to $18k and remain bullish despite all the weakness we are seeing on the price chart.
We also created a video below where we talked more in-depth about the current patterns forming in the Bitcoin market, key levels to watch out for, and a few price scenarios to expect in the coming days.
To gain more information on how to partake in this coming Bitcoin Bull run and trade this cryptocurrency, you can read my How To Trade Bitcoin Guide. You can also check my top list of Best Bitcoin Exchanges To Trade With
