Earlier today the price of Bitcoin (BTC) hit $18,815 on Binance for the first time in nearly three years. Following the breakout, BTC is on track to see a new all-time high in the near term for four significant reasons.
The factors that make a new record high likely are growing institutional demand, reduced selling pressure, a spot-driven market rally, and the significance of the $18,500 resistance breach.
Bitcoin is seeing reduced sell pressure
For Bitcoin holders to sell, they need to first deposit BTC to exchanges. When BTC exchange reserves drop, it often indicates that there is low sell-side pressure in the market.
According to data from Glassnode, the year-to-date Bitcoin balance on exchanges dropped 18%. Analysts at the on-chain market analysis firm said that BTC liquidity is continuing its downward trajectory.
This trend is significant because it shows there is hardly any appetite to sell Bitcoin at the current price level despite its rally from $3,600 to $18,700 within eight months.
Institutional demand is growing
After BlackRock CIO of fixed income Rick Reider discussed Bitcoin on CNBC, billionaire investor Mike Novogratz said BTC is now an institutional asset.
During the CNBC interview, Reider said that Bitcoin is here to say and that it has the potential to evolve. He suggested that millennials favor BTC and that the strengthening reality of digital currencies becoming mainstream payment options were both major positive factors for BTC.
Considering institutional trends, Novogratz said 2021 would likely be as good or better than 2020 for Bitcoin. He said:
“Bitcoin is now an institutional asset. Period. The good thing is most institutions aren’t in yet. It’s why 2021 will be as good or better than 2020.”
The market is spot-driven amidst a sell-side crisis
On Oct. 10, a cryptocurrency derivatives trader known as “Light” said Bitcoin is showing signs of a…