4 reasons why you will recover and hit the ATH

Bitcoin price fell and entered into a technical correction just days after rising to a record high.

Bitcoin (Bitcoin), which started the week by rising to a record high of $108,250, has erased most of the gains made this month. It has fallen by 13% from its highest level since the beginning of the year, and entered into a local correction. Here are four reasons why Bitcoin prices are likely to bounce back and retest their all-time high.

Bitcoin price corrections are nothing new

The first main reason for the BTC price recovery is the ongoing decline, Which we expected, Nothing new. Bitcoin often pulls back sharply after rising to a crucial resistance level.

The long-term chart below shows that Bitcoin jumped to $19,778 in December 2017 and then reversed by 84%. It then fell by 55% after reaching a high of $64,647 in April 2021. Most recently, Bitcoin peaked at $73,885 in March, then collapsed by 33% during August.

This pullback will likely be followed by a strong rebound as BTC still has strong fundamentals. Mining production has declined since the recent halving event, while the amount of Bitcoin on exchanges has continued to decline. Likewise, spot Bitcoin ETFs have attracted more than $34 billion in assets, a trend that is expected to continue, especially from institutional investors.

Bitcoin’s MVRV score is still low

Another reason that could lead to a rebound in Bitcoin prices is that the common market value of the realized value score is still lower than it was during historical corrections. The MVRV-Z score is calculated by subtracting the realized market value from the traded market value and then dividing it by the standard deviation.

according to Queen GlassBitcoin’s MVRV peaked at 2.89 earlier this week. Bitcoin received a score of 3.05 during the March bear market of this year. It also received a score of 3.21 in the January 2022 correction and 5.25 in March 2021. This indicates that the coin has greater upside potential once the panic selling subsides.

The accumulation of Bitcoin whales continues

Major Bitcoin holders are still accumulating coins, and hopes for a strategic reserve are rising. MicroStrategy added more BTC to its wallet and now owns more than 439,000 coins. Marathon Digital, the largest Bitcoin miner, has more than 44,300 coins, while Riot Platforms and Hut 8 Mining have also added thousands of coins.

After observing the success of MicroStrategy, more companies are likely to purchase Bitcoins. Over the past four years, MicroStrategy has gone from a technology startup to an $80 billion company.

In addition, discussions about creating a strategic reserve of Bitcoin, especially by Donald Trump, have gained momentum. In a recent note, Bitwise noted And more countries could follow the United States’ example, with the US public debt rising to more than $36.4 trillion.

Bitcoin price has bullish technicals

Finally, Bitcoin price has formed strong bullish technical patterns when viewed from a broader perspective. The weekly chart shows that the currency formed a cup pattern between 2021 and March of this year. It then formed a trend between March and October, followed by a strong comeback.

Bitcoin has risen most weeks since then, and it is often not uncommon for the asset to pause in an upward trend. Bitcoin’s target for this rally is $122,000, which was determined by measuring the depth of the cup at 76%. Adding 76% to the top side of the cup gives a target of $122,000.