Apart from the on-chain factors that drive Bitcoin’s bull run, a few external indicators that precede every bull run have made the headlines yet again such as a bill on a probable cryptocurrency ban in India, the Chinese new year FUD, exchange outages like Coinbase and Binance, and altcoin price rallies, etc. Once the sell-off got triggered in Asia, Bitcoin inflow into exchanges is expected to increase considerably.
In a recent blog on WOAS, Scott Melker emphasizes how sentiment may be everything when it comes to Bitcoin’s bull run. The sentiment has largely remained the same throughout the current market cycle. In the absence of a cascading sell-off, it has remained positive on exchanges. In that case, there is increased selling pressure due to an increase in active supply. However, after a correction, the bullish price trend may carry forward. Previously, the 2017 bull run had over 9 drops, before the price hit an ATH. If it followed the same trend, then the bull run may continue.
Institutional demand is expected to continue rising as the price rallies. In an edited transcript of the VN earnings call, he suggests, “no reason why we cannot add it to our network, which already supports over 160 currencies”. The price has come a long way from the historic drop of 80% in 2018 and the Black Thursday in 2020. Narratives like digital gold and hedge against inflation have driven the price up to the current price level. If this continues, and once price discovery starts after $40000, $50000 may become an easy price target to achieve before August 2021, based on the S2F model.
The Fear & Greed Index considered a strong signal of the market sentiment. It currently shows extreme greed. Most price predictions based on the coin’s technical analysis have placed the asset anywhere between $50k to a whopping $300k. The last time, the price approached $15k, there were expectations of the price hitting $100k, considering $20k was just a short-term top, the same may happen this time around. As the price crossed $20k and price discovery started, the S2F model became more relevant. Nearly everything has been ticked on the bull run checklist and this could mean that it continues.