Bitcoin 90-Day Active Supply Soars to Pre-2017 Bull Run Level: Report

An on-chain metric which has been declining since 2017 is now signaling a bullish trend, analysts from Stack Funds say.

A new report analyzing on-chain activity says that Bitcoin (BTC) is now due for a bullish phase based on supply movements.

Published by asset manager Stack Funds on July 2, the findings suggest that 90-day active supply is dictating bullish potential for BTC/USD.

BTC price to rise “sooner rather than later�

Publishing an accompanying chart for the metric, Stack argued that it has important implications for historical price behavior.

“The data provides an indication of two folds. Firstly, the 90d % of Bitcoin active supply has tapered over the past 3 years, from 36% to 17%, suggesting that investors’ time horizon has lengthened as Bitcoin are held over longer periods in their wallets,� the report states. 

“Secondly, prior to the 2017 and 2019 bull run, where Bitcoin hit $20,000 and $14,000 highs against the dollar, there was evidence of steep surges in the 90d % active supply (depicted in the green zones).�

The trend has appeared since Bitcoin’s price crash in March, an event which proved to be something of a watershed moment for traders.

Stack concluded:

“As statistics have shown, a potential run-up in Bitcoin prices can be expected, which has yet to materialise, leading us to believe that the preceding rise in Bitcoin prices could happen sooner rather than later.�

Bitcoin 90-day active supply 3-year chart

Bitcoin 90-day active supply 3-year chart. Source: Stack Funds

BTC price should be “closer to $12,000�

Stack comes hot on the heels of a highly bullish report from Bloomberg, which last month eyed price-performance exceeding $12,000.

Current ranging price behavior around $9,000 is “compression� for Bloomberg, and a reaction should come in the form of gains in the short term.

“Volatility should continue declining as Bitcoin extends its transition to the crypto equivalent of gold from a highly speculative asset, yet we expect recent compression to be resolved via higher prices,� analysts summarized.

While many indicators are encouraging, it is the demand which is clearly bullish. This, the report continues, is also the “most important� category to win over for Bitcoin.

As such, Bloomberg joins various others, including Cointelegraph Markets analyst Michaël van de Poppe, in forecasting a potential price target of $12,000.

“Increasing addresses used, on-exchange investment product inflows and futures open interest create firmer underpinnings for the benchmark crypto,� it states. 

“The number of active Bitcoin addresses used, a key signal of the 2018 price decline and 2019 recovery, suggests a value closer to $12,000, based on historical patterns.�

Bollinger bands foresee volatility

Beyond that level, the bullish potential by no means fades. In a technical prognosis, Bloomberg describes Bitcoin as a “caged bull� which can hit even higher levels.

“About $8,000-$10,000 is the primary consolidation range,� it explains. 

“We see Bitcoin, at about $9,200 on June 25, as more likely to head toward the 2019 high close of just below $13,000 than sustaining under $8,000.�

A classic indicator, Bollinger Bands, points to a breakout “soon.� Historically accurate at charting volatility in either direction, the bands have shown characteristic narrowing in recent weeks — a key precursor to bigger price movements.

BTC/USD 6-month chart showing Bollinger Bands

BTC/USD 6-month chart showing Bollinger Bands. Source: TradingView

Last month, their creator, John Bollinger, himself weighed in on BTC/USD, cautioning against optimism over a spurt above $10,000.

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