Crypto traders were recently reminded of the events that took place in 2017; when BTC and other altcoins took the world by storm with huge returns. The sustained and sudden breakout has created a sense of panic among the people who neglected to accumulate during the bear market’s depths. Here are some of the reasons why the price of Bitcoin has been soaring for the past couple of years.
Heavy Accumulation
At the beginning of the year, it was concluded that this year will be the year of accumulation for Bitcoin. This is exactly what has been observed over the past couple of months. The current distribution/accumulation line shows that BTC has been in a very high accumulation phase since the start of March 2019.
The cumulative A/D line has been soaring in lockstep with the value of Bitcoin. Essentially, a rising A/D line confirms a soaring price trend. It also shows that more people are purchasing and holding than spending and buying.
The Unspent Transactions
The number of unspent transaction outputs on the whole BTC network has increased to record highs. As a matter of fact, the number of unspent transactions has been growing in linear fashion since mid-2018. This trend began to intensify in January. This implies that fewer people are selling the coins and buyers are holding and accumulating their positions indefinitely.
The Bitcoin Whales
Even though Bitcoin has been in accumulating since the beginning of the year, it was a mysterious BTC whale that sparked a 20-percent rally at the start of April 2019. The whales have continued to move huge sums of the coins over the past two months. The performance of the crypto over that period suggests that oversized holders have come out as net buyers as opposed to being just sellers.
The Dominance of Bitcoin
The parabolic surge of Bitcoin has been accompanied by a very sharp growth in the dominance rate. This basically makes references to the percentage of the crypto industry held in Bitcoin. The rate of Bitcoin dominance peaked at 59.4% just some few days ago, which is the highest since December 2017. This implies that the members of the crypto system have moved their holdings from the altcoins to BTC, and they have done this with much intensity. The crypto market goes through cycles and trends, some of which will favor the tokens and altcoins whereas others appear to show greater preferences for BTC.
Uncorrelated with the Global Market
The extent to which BTC has outperformed some of the leading altcoin is alarming. As a result of the recent price surge, BTC has returned a huge 87% year-to-date. There is no major asset class even that comes close – not bonds, stocks, lean hogs, or even crude.
The Organization of Economic Cooperation and Development, World Bank, and the International Monetary Fund have all cut their outlook on the international economic growth. The central banks in North America, Europe, and Asia have been forced to rethink their monetary policy amidst the signals of the slowing deflation and growth.