According to on-chain analyst Willy Woo, the price of Bitcoin (BTC) could achieve a "conservative" target of $200,000 in 2021. The prediction revolves around the fact that long-time investors seem more confident in the recent rally.
There are two key data points that suggest Bitcoin’s ongoing rally could explode higher. First, “HODLers,” or long-time BTC holders, aren't moving their funds for longer than in previous rallies. Second, BTC held on exchanges continues to decrease, which reduces selling pressure.
A bullish Bitcoin re-accumulation phase is happening
The re-accumulation of Bitcoin has remained a consistently bullish trend throughout 2020. It has continuously decreased the selling pressure on BTC, allowing a more stable rally without major 30%-40% corrections as frequently seen in 2017.
Woo noted that he is bullish for 2021 because Bitcoin’s re-accumulation phase means the amount of BTC that could be sold is much lower compared to the previous bull cycle. He said:
“I've never been so bullish for 2021. This re-accumulation phase coincides with spot market inventory depletion roughly 2x longer and deeper than the last cycle. It will send BTC.”
Atop the declining Bitcoin reserve on exchanges, Woo found that HODLers are “holding stronger.” In 2017, the amount of gain per the amount of capital invested in Bitcoin hovered at around $0.25. This figure increased to $0.35 in 2020, which means more investors expect event bigger profits in the future.
Based on the combination of the two optimistic on-chain trends, Woo said that Bitcoin could achieve a "conservative price" of $200,000 by the end of 2021. He explained:
“My Top Model suggesting $200k per BTC by end of 2021 looks conservative, $300k not out of the question. The current market on average paid $7456 for their coins. You all are geniuses.”
As reported in May, Bitcoin HODL wave data also supports the argument the HODLers from the 2017-2018 bull cycle aren't selling at these relatively high prices, including high-net worth individuals or "whales."
However, this data also suggests that some earlier HODLers from three to seven years ago are taking profit after a prolonged BTC rally, heightening the chances of a correction in the short term.
Woo called a massive BTC rally in March 2020
As Cointelegraph previously reported, Woo has been calling for an extended Bitcoin bull run since March 2020.
On Mar. 4, Woo told Max Keiser, the host of RT’s Keiser Report, that Bitcoin could hit $135,000 in the bull run. He said at the time:
“You go could 35 times the cumulative average of the price — and that’s actually picked every single top in the ten-year history of Bitcoin — right now that’s sitting above $50,000, but it keeps climbing the longer it runs for.”
Although the price of Bitcoin fell to sub-$4,000 on Mar. 12 in a “Black Thursday” crash that shocked the market, it has swiftly recovered since.
The bull trend that was bound to happen in March before the crash appears to be in full swing now following BTC’s strong nine-month recovery.
But in the near term, analysts believe that the likelihood of the recovery in the U.S. dollar could cause Bitcoin to see a minor pullback. Following the biggest three-week liquidation in the gold market, analysts also see the precious metal rebounding, which could stall BTC’s momentum in the short term.