Bitcoin Price Forecast: BTC to Cross $50k Before 2024? —Key Indicators

Key Insights:

• Bitcoin (BTC) price has continued to consolidate within the $44,100 and $43,000 narrow range over the past week. 
• Bitcoin Dominance (BTC.D) has declined by 4% in the last 5 days, as retail investors shift focus to the bustling altcoin markets.
• The Coinbase Premium Index on-chain indicator reveals that US-based BTC whales have recently dialed up their buying activity significantly. 

Bitcoin’s (BTC) price has consolidated within the $44,100 and $43,000 narrow range since Dec 20. On-chain data trends reveal that while retail investors are switching focus to the bubbling altcoin markets, US-based whale investors have been doubling down on their bullish BTC positions.

Corporate Entities  Double Down on BTC, Ignoring Historic Rallies in the Altcoin and Memecoin Markets

Bitcoin has posted a relatively flat price performance in the past week, despite rousing bullish events such as Argentina’s adoption of BTC as an official currency.

During that period however, mega cap altcoins like Solana (SOL) and Avalanche (AVAX) have skyrocketed to historic peaks, while Shiba Inu (SHIB) and BONK also made giant strides in the memecoin sector. 

In effect BTC.Dominance, the share of the aggregate valuation of the crypto market that BTC occupies, had rapidly decline by 4% between Dec 20 and Dec 25. 

The resulting 3% drop in Bitcoin Dominance (BTC.D) is a prime indicator that retail investors are shifting focus to the alts, seeking to FOMO in on the rally.

But on the bright side, Bitcoin price has held firmly above the $43,000 support level, signaling that other stakeholders remain bullish on BTC while retail investors seek to join the altcoin party. 

A key indicator is the unusually high buying activity observed among Bitcoin whales in the recent days. According to CryptoQuant’s Coinbase Premium Index metric, US-based whales have increased their buying pressure this week.

As depicted below, the Coinbase Premium Index soared to 0.1% on Dec 22, the highest since the crypto market rally began in mid-October.  

The Coinbase Premium index measures the marginal difference between Bitcoin spot prices quoted on Coinbase and that of Binance. 

Binance is regarded as the dominant exchange for retail trading globally. Meanwhile, Coinbase exchange’s clientelle is dominantly US-based corporate entities and institutional investors looking to trade within a highly regulated environment. 

Hence, this Coinbase Premium index is an important measure of whale activity. It rises into positive values when Bitcoin spot price on Coinbase exceeds the Binance prices and vice versa. 

The spikes recorded this week, indicates increased  buying pressure recorded among Bitcoin whales trading on Coinbase. This invariably shows that the whales have continued doubling down on BTC amid the altcoin market rally. 

Bitcoin Price Forecast: Can it Reach $50,000

If the whales keep up the buying pressure, Bitcoin price can make an attempt at the $44,000 resistance before 2023 runs out.  And if that resistance gives way, it could open the door to a $50,000 retest.  

However, the In/Out of the Money Around Price (IOMAP) data, which groups the current Bitcoin holders according to their entry prices. 

It shows that 2.24 million current holders had acquired their BTC holdings at the maximum price of $44,019. If those holders also look to reinvest their profits in the altcoin markets, BTC price could continue to struggle in the short-term.

But if the bullish whales traders can keep up the buying momentum, they could smash that resistance and edge toward $50,000 as predicted.

On the downside, the strategic investors can hang their stop loss orders around the $39,600 area for major support. At that range, 5.13 million holders that bought 1.73 million BTC at the average price of $39,675. They could offer significant support and prevent major downswing in the short-term.