Bitcoin and the entire crypto market shot to record highs on Tuesday, fueled by a strong rally in Bitcoin SV. Bitcoin soared past $8,800 after gaining over 20 percent, but one well-known trader is far from impressed.
In a recent episode of CNBC’s Fast Money, BKCM CEO Brian Kelly, who is normally the biggest bull in the room, explained why he is bearish despite BTC’s recent big move, and it has something to do with the asset’s price overtaking its fundamentals.
Bitcoin to the moon? The cryptocurrency is taking off again! pic.twitter.com/NlrB2BP1uT
— CNBC’s Fast Money (@CNBCFastMoney)
BTC Price Surpassed Address Growth
Brian Kelly says address growth is one of the fundamentals that he pays close attention to.
Kelly noted that back in December, the address growth was increasing whilst bitcoin was caught in a tight bear grip. This, according to Kelly, was a huge buy signal. Yet, the opposite is the case right now: bitcoin has gone ahead of the address growth. Kelly added:
“So, just like I said about Apple, just like I said about ‘triple Qs’ in 2000 when an asset goes straight up, that means a lot of the news is priced in.”
As for bitcoin’s next move, Kelly opined that bitcoin has a huge upside “maybe just not tomorrow.”
Other key fundamentals that are used by analysts to determine bitcoin’s trajectory in the long-term are its mining power, developer activity and growth of infrastructure in the bitcoin ecosystem.
The bitcoin’s hash rate printed a new all-time high earlier this month and seems on track to shatter that record. Developer activity on bitcoin has been rising over the past years. Also, the recent launch of bitcoin options by CME indicates that there is a growing interest in retail and institutional crypto-centric infrastructure.
While BTC’s long-term outlook remains intact, the short-term is not so rosy.
Is A Pullback Looming?
Bitcoin has rocketed by over 20% in January only. Most investors anticipate bitcoin to sustain its current uptrend in the near-term. However, the top crypto is currently facing heavy resistance at the $9K level and some analysts have suggested the possibility of a healthy pullback.
For instance, crypto trader Josh Rager recently said BTC could correct slightly to the $8,200 and $8,300 levels in the near future. BTC is currently trading at $8,704.73 after gaining 2.20% percent in the last 24-hour period. These gains pale by comparison with other major cap cryptos like ethereum, XRP, and BSV which are up by 9.39%, 6.66%, and 69.99% respectively.
The Bottom Line
When one of the most prominent bulls flips bearish, it is highly advisable for traders to weigh erring on the side of caution. Evidently, bitcoin has had a stellar run over the last couple of days. Therefore, a slight correction is not completely out of question.
But, if bitcoin, in fact, reverses its current trend, long-term HODLers should not fret over it. They could instead accumulate more sats before the asset continues its uptrend.
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