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Crypto analyst and trader Ali Martinez, known on crypto Twitter by the name @ali_charts, has shared his thoughts on what is stopping the world’s flagship cryptocurrency, Bitcoin, from breaking out close to the $50,000 level.
Stiff resistance stands in Bitcoin’s way
Martinez has written that the Bitcoin UTXO Realized Price Distribution Index has bumped into stiff resistance at the $38,500 level. The above-mentioned index shows how much BTC was acquired at what price. If the flagship cryptocurrency manages to overcome this crucial resistance level, chances are that BTC will manage to advance toward the $47,360 price mark, according to Martinez – this is nearly a $10,000 difference between the current BTC price and the predicted one.
Since Friday, Nov. 24, Bitcoin, also known as digital gold, has undergone a loss of nearly 3%, dropping from a local high of $38,426. The growth to that price peak was followed by an immense liquidation of Bitcoin short positions worth $2 million.
Signs hinting at forthcoming crypto rally emerge
It was not only BTC shorts that were liquidated – a total of $71.15 million worth of crypto positions was liquidated across the cryptocurrency market. This may indicate an upcoming crypto rally.
Besides, according to a recent tweet published by Santiment on-chain data aggregator, whales were quite active between Aug. 19 and Oct. 16 as they transferred a massive amount of USDT (3.54% of the whole supply) and 0.72% of the USDC circulating supply to crypto exchanges.
It was these astounding transactions of stablecoins to trading platforms that were among the drivers that sparked the rally across the whole cryptocurrency market from the end of October to the middle of November, Santiment says.
Their report shows that USDT and USDC (stablecoins frequently used for buying Bitcoin and Ethereum, first of all) flowing back into trading venues will serve as a major sign, “crucial to seeing market caps continuing to increase for a big final 5 weeks of 2023.”
Major Bitcoin price catalyst approaches
In the meantime, the crypto community is looking forward to next year as, in the second half of spring 2024, the fourth Bitcoin halvening event is expected to take place. This will mean that miners rewards’ will be cut in half – from the current 6.25 BTC to 3.125 BTC – and half the Bitcoin will be injected onto the market, respectively, since mining is the only way to produce or mint new Bitcoins for circulation.
Many experts believe that halving is a major catalyst for the Bitcoin price. One report in particular points out that after the first halving, BTC surged 94x in 2012, after the second one in 2016 it rose 30x, and in 2020 Bitcoin went up 6x after the halving, reaching a new all-time high (the second in a row) of $69,000 in 2021.
Therefore, the report suggests that if after the halving in 2024 Bitcoin goes up at least 6x, it will be able to come really close to the $220,000 level, which vocal Bitcoiner Max Keiser often predicts will be reached within the next few years.