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3 reasons why the price of Bitcoin could be on the verge of a new upward trend

The price of Bitcoin (BTC) has risen 170% in the last three months from $3,600 to $9,700. Despite this huge 3-month recovery, a number of fundamental factors point to the possibility of another upward trend in the short term.

Three reasons why Bitcoin is likely to experience a rally are increased currency outflows, support for miners‘ revenue pursuits, and the growing number of so-called „hodlers“ or investors holding BTCs for extended periods.

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The confluence of three compelling factors prepared Bitcoin for a promotion
As Bitcoin output from exchanges increases, it suggests that investors are preparing to maintain BTC for the long term.

Typically, exchange users withdraw Bitcoin with the intention of sending BTC to a personal wallet, and this trend often indicates that users have less appetite for trading Bitcoin in the foreseeable future.

The decline in the Bitcoin exchange flow coincides with a recovery in miners‘ income. As miners generate more BTC through mining, after the latest difficulty adjustment of the download rate, existing miners are becoming more profitable.

If the operational costs of operating Bitcoin decrease, the need to sell more BTCs in the short term for large mining sites could also decrease. There is a possibility that the output of BTC will come partly from the miners.

Verifiable data from the chain show that the miners sold less Bitcoin than they extracted last week. In the last seven days the miners have mined about 6,694 BTCs and the data show that they have sold 6,384 BTCs, resulting in a positive inventory of 310 BTCs.

Bitcoin miners sold less than they mined last week

A crypto currency trader known as Byzantine General wrote:

„The outflow of the exchange continues to rise. The miners‘ earnings are finding support. The miners are hogging more and more. So while the chart may not look very exciting, I wonder where the bears think the big selling pressure is going to come from.“

Overall, miners have been moving less Bitcoin and applying less selling pressure on the spot price. The combination of fewer sellers in the Bitcoin market and a consistent increase in long-term hodlers increases the likelihood of a continued rally.

These two Bitcoin chain metrics suggest that the post-halving downturn is over

There is a variable that can ruin the upward trend
The prediction of a new phase of upward momentum for Bitcoin in the short term is mainly based on the assumption that the miners will not sell much BTC in the coming months. But, strong changes in the price of BTC and the difficulty in extracting BTC could quickly cause a change in trend.

An ideal scenario for a strong rebound in Q3 2020 would require the price of Bitcoin to remain stable above $10,000 and the amount of BTC sold by miners on a daily basis to continue to decline.

If this happens, it would indicate that the Bitcoin price broke through a multi-year resistance with growing confidence from both investors and miners, making a proper long term bull market possible.