- Bitcoin has pushed prices to a new all-time high of $52,800.
- Prominent industry warns of a potential correction, while whales continue accumulating BTC at a substantial rate.
- As BTC’s supply on cryptocurrency exchanges is depleted, its downside potential is being reduced.
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After a year-to-date return of over 80%, some analysts warn that Bitcoin is approaching overbought territory. Still, a particular on-chain metric suggests that BTC is primed for another massive rise.
Market Value Up By 60%
Bitcoin’s market value has risen by nearly 60% since the beginning of the month. BTC was recently able to reach a new all-time high of $52,800 as a new wave of retail investors flocked to the coin.
More than 20,000 new addresses have joined BTC’s network each day over the past five weeks, signaling a spike in user adoption. It appears that Tesla’s $1.5 billion Bitcoin investment put Bitcoin in the spotlight as trust in the global financial system erodes.
Bitcoin Looks “Unsustainable”
Despite the massive gains that BTC has posted over the past month, some analysts believe that a major correction is underway.
JP Morgan’s Global Market Strategist Nikolaos Panigirtzoglou has suggested that Bitcoin “looks unsustainable” at the current price levels. Panigirtzoglou maintains that an inelastic supply of Bitcoin led to a price premium for both “real money” and “speculative” investors, while retail interest dwarfing the institutional inflows.
For this reason, the analyst expects that volatility would need to decrease to sustain the recent upswing.
Plenty of Room to Go Up
Despite the grim worst-case scenario, Bitcoin looks fundamentally strong. Whales have entered a buying spree, depleting the amount of Bitcoin available on exchanges and trading platforms. Market behavior of this type reduces the selling pressure behind the cryptocurrency, consequently capping its downside potential.