In search of even higher price targets, the world’s largest cryptocurrency has now broken the next psychological obstacle of $20,000. In 2020, most weekly red candles have struggled to impact the long-term price, and now that we have eclipsed this crucial point, it is important to look beyond them. There is no strong case against bitcoin lasting over $20,000 in the future as one tries to look at the core statistics. Many of the vital indicators confirm that at these prices, there is less bitcoin going around to buy. It’s only a matter of time before the price reacts positively.
Exchange Reserves Keep Dropping
Since March 2020, there has been a continuing downward trend in available supplies. This trend, including some small changes in BTC values along the way, is not slowing down either. There has been less than BTC 3 million in exchange wallets for some time now. An incredible trend, given how the valuation in recent months has stayed above $18,000 without any issues.
This is already over 10 percent of the circulating supply, one might claim. And it is a fair argument, but in the grand scheme of things, it is not significant. The price of the asset will still go up if 90 percent of something is not available for easy buying. For bitcoin, the amount that is easily available is continuously decreasing.
Many of the businesses unexpectedly invested in bitcoin are helping part of this momentum. The following details demonstrates how corporations are treating today’s world’s leading cryptocurrency.
All these treasuries helped to further decrease the availability of BTC available, generating a fresh degree of shortage that pushed us past $20,000.
Fewer People Store BTC On Exchanges
The continuous Bitcoin netflow of recognized exchanges is making matters more intriguing.
There are more negative outflows compared to positive statistics in 2020. This is another extraordinary development given the spectacular growth in the value of BTC since March 2020. That alone appears to encourage more individuals to transfer their money away from exchanges.
The shortage aspect will become more outspoken as more and more BTC leave exchanges on a regular basis than can be applied to ongoing deposits. Already, Bitcoin has a small availability. Every month, larger and larger portions of the available supply are made unavailable.
It was only a matter of time before the market moved to a higher gear and blazed past the “resistance level of $20,000.” This anticipated price rise took place before 2020 came to an end, suggesting that bitcoin may prove an exception next year.
Dormant Supply Remains Unaffected
The dormant supply is one part of the bitcoin price that both newcomers and speculators appear to ignore. The corresponding Glassnode map confirms that over the last three years, 33.153 percent of the bitcoin supply has not moved to a different address. During the 2017 price run, owners of these BTC balances kept the same and are now doing the same.
These numbers indicate that before a much higher valuation becomes the new standard, BTC investors are not interested in selling. It could be $50,000, or perhaps six figures per BTC. More significantly, for some time to come, traders will not notice this supply on exchanges or other trading platforms.
New Use Cases For Bitcoin Holders
The goal is to close the gap between bitcoin and decentralized finance with exchanges and other platforms. pFor example, Lightning Labs has released its liquidity marketplace in Lightning Pool, IOVlabs has implemented a new sidechain model to allow more versatility with RSK, and people are planning a subscription product at MXC Exchange that provides returns on locked up BTC.
In the long run, decentralized finance without Bitcoin would have little chance of living. Additionally, for bitcoin investors who have no interest in selling at the current price, there is a lot of liquidity.