Bitcoin Uptrend Just Starting, BTC Breaking $31K Is An 'Air Pocket To $39K': Blockchain Analyst

Bitcoin's current rally is just the start, according to a blockchain analyst, who believes when the king of crypto broke the $31,000 threshold, it was just an "air pocket to $39,000."

The crypto market unexpectedly saw a surge in Bitcoin at the start of the week, with the world's largest crypto asset by market capitalization initially seeing a significant double-digit gain of 10% and eventually trading over $35,000 early Tuesday.

But, while BTC is slowly retracing its value and trading over $34,000 Tuesday, Jamie Coutts, the pragmatic blockchain analyst, who built the crypto research product at Bloomberg Intelligence forecasted in his recent analysis that the tight range Bitcoin had for over six months and its recent break to $31,000 could be explosive.

"For half a year, this asset's danced between $25k-$31k. More coins have changed hands in this tight range than anywhere else in its price distribution. This is also the longest period of compressed volatility in its history. The next phase in the breakdown of the fiat monetary order is nearly upon us. Gold is also hinting at this. When Bitcoin breaks $31k, it's an air pocket to $39k," Coutts said.

An air pocket is a term used to refer to a price range where little volume has occurred and few positions are held, which due to lack of liquidity, makes the area volatile.

The blockchain analyst also noted that active addresses holding Bitcoin have seen a sharp downturn, which is a bearish signal to the price of BTC.

Coutts also predicted that one of the two things could happen -- a break in either $31,000 or a collapse above $24,000.

"Bitcoin's active addresses (AA) have dropped sharply- the most pronounced 1-month fall since mid-2021. While BRC/Ordinals have distorted some onchain metrics this year, a dwindling AA typically is not price positive. The divergence between price and AA underscores building market expectations for ETF listings and a liquidity pivot," Coutts said in a tweet, adding, "With the mkt chopping between $25k-$30k everything is noise until we breach the $31k resistance (or $24k support)."

It was over the weekend when Coutts shared his analyses and by late Monday night, Bitcoin had already skyrocketed to $35,300.

Based on Coutts' analyses, BTC will continue to surge and could hit the $39,000 price level anytime soon.

The surprising uptrend of the world's largest crypto asset by market capitalization was due to the increasing investor confidence that spot Bitcoin EF applications would be approved by the SEC soon.

This anticipation was further fueled when BlackRock's Bitcoin ETF ticker was listed on the Depository Trust & Clearing Corporation on Monday, which suggested the investment giant's preparedness to offer the product with just the SEC's approval, the only thing getting in the way.

"Bitcoin's (BTC) price surged last night, briefly reaching $35,200 which can be attributed to various factors, including the impending halving event and growing investor confidence in the approval of BTC Spot ETFs. This price movement solidifies BTC's momentum compared to the broader digital asset market," Matteo Greco, Research Analyst at the publicly listed digital asset and fintech investment business Fineqia International explained the recent Bitcoin surge to International Business Times in a note.

"The iShares Bitcoin Trust, filed by Blackrock, has been listed on the Depository Trust & Clearing Corporation (DTCC), which handles NASDAQ trades. Additionally, Blackrock updated its filings with the SEC, indicating its readiness to seed its ETF starting from October 2023. This proactive approach from Blackrock suggests their preparedness to initiate trading promptly upon receiving approval from the SEC, further substantiating the optimistic sentiment surrounding an impending approval," the research analyst added.