What Comes Next For Bitcoin After Reaching $35k?
Institutional activity picks up amid signs of an early bull market
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This week we dive into on-chain metrics regarding Bitcoin’s outlook. Bitcoin is showing strength both from a tactical and longer-term perspective, with institutional demand reinforcing cyclical tailwinds.
Network Fees — Sum of total fees spent to use a particular blockchain. This tracks the willingness to spend and demand to use Bitcoin or Ether
- Bitcoin fees increased by 44.8% as transaction activity accelerated during the price rally
- Ethereum fees grew even further, nearly doubling within 7 days, driven by Uniswap volumes reaching their highest weekly levels since June
Exchanges Netflows — The net amount of inflows minus outflows of a specific crypto-asset going in/out of centralized exchanges
- Bitcoin recorded $190M in outflows, while ETH saw $100M in inflows from centralized exchanges this week
What Comes Next For Bitcoin After Reaching $35k?
Bitcoin’s price touched $35,000 for the first time since May 2022. BTC is now up over 100% in 2023. This price action has awoken animal spirits in crypto as signs emerge of Bitcoin being in the early stages of a bull market.
Not only are cyclical patterns aligning for Bitcoin, but short-term activity is also showing signs of heating up.
Institutional Activity Picks Up — The number of transactions of over $100k on the Bitcoin blockchain reached its highest level in 2023
- The Bitcoin spot ETF applications appear to have increased whales’ and institutions appetite for Bitcoin
- Transactions of over $100k had previously spiked in late June after Blackrock’s ETF filing, and have now surpassed that level as Bitcoin sets new yearly highs
The recent rise in institutional activity might be a harbinger for what comes in 2024.
Cyclical Uptrend — On-chain analytics point to a bullish Bitcoin outlook
- Bitcoin is set to undergo the halving in 2024, a few months after the first spot ETF is expected to go live
- This decreases miners’ marginal selling pressure while demand picks up from institutions gaining easier access to Bitcoin
- The Bitcoin market value to realized value (MVRV) ratio shows that despite reaching yearly highs, Bitcoin is not as overheated yet as during previous bull markets
- Historically, bitcoin bull markets have peaked around 300%+ MVRV, which in comparison to the current 150% value, suggests the bull market has room to run further
However, macro forces and potential black swans could bring a correction following the recent appreciation.
Levels to Watch — Based on buying activity recorded on-chain, we can identify price levels where BTC may be heading next
- The recent high of $35,000 is the next resistance point for Bitcoin, where previously 664,000 holders bought 340k BTC
- If this level is surpassed, the next point where trading activity has been concentrated is around $38k-$39k, where 333k BTC was acquired
- On the other hand, in case of a correction, buying activity seems to be concentrated just above of $30k, where 553k BTC traded hands
Overall, there are cyclical and tactical factors pushing Bitcoin further. The recent rise in institutional activity appears to be adding fuel to the beginning of a bull market fire.
