Amid the continuing correction in Bitcoin and the broader crypto markets, top analyst PlanB believes that the BTC bull market is far from over.
In a new tweet, the crypto analyst known for being the first to apply the stock-to-flow (S2F) ratio to Bitcoin says that the sell-off that witnessed BTC plunging from $60,000 to $52,000 on April 17th is an event designed to rinse out overleveraged traders.
“In my opinion, just a normal liquidation event, where dumb leveraged longs hand over their coins to smarter and stronger hands. Bull market untouched and in full swing.”
The crypto analyst also highlights Bitcoin’s robust fundamentals, where the supply of BTC continues to drop.
“Bitcoin dipped a bit, but the supply shortage is real… and growing.”
Fellow trader Bitcoin Jack uses charts from crypto insights platform Glassnode to reveal that BTC moved from small hands to big hands after the capitulation event.
April 15, 16 and 17th $BTC saw ~482K addresses deposit to exchanges
Same period ~220K addresses were withdrawn to from exchanges & net positive outflow recorded
Many tiny hands in -> fewer bigger hands out
Confirmed by short term holder SOPR capitulation
Data: @glassnode pic.twitter.com/zXXNpkXHXa
— //Bitcoin 𝕵ack 🐐 (@BTC_JackSparrow) April 19, 2021
Glassnode’s Spent Output Profit Ratio (SOPR) is an indicator that shows whether market participants are selling at a profit or loss. According to Bitcoin Jack’s chart, the SOPR is currently below one, indicating that sellers would be letting go of their BTC at a loss.
In a separate tweet, PlanB notes that Bitcoin’s momentum indicator, the relative strength index (RSI), has yet to hit its peak.
“Bitcoin is looking strong at RSI 92. Still not above RSI 95 like 2017, 2013 and 2011 bull markets. I calculated BTC price needed for RSI 95 at April close: $92,000.”
If Bitcoin’s RSI continues to hover above 90, PlanB calculates that the leading crypto asset will skyrocket over 450% in the coming months.
“RSI is 92 now and April is the 2nd month >90. If this run continues 4 more months at RSI 92, BTC will be $300,000 in July (not saying this will happen, just what if). In my opinion, after next all-time high (maybe end this year), volatility will return and we can not rule out 50-80% draw down.”
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