What should we do if Bitcoin stays above $18,000 in the short term?

Here, the story driving the price increase is the “supply outstrips demand narrative,” with the total circulating supply of Bitcoin on exchanges currently just over 18.5 million .

Even more interestingly, with nearly 2.5 million Bitcoins left to be mined, the amount of Bitcoin being withdrawn from exchanges exceeds the amount of Bitcoin mined per quarter , which strongly supports the issue of supply shortage on spot exchanges.

The number of active Bitcoin addresses has increased significantly over the past quarter, however, scarcity meets growing demand . In fact, the decline in Bitcoin reserves can be compensated by profit-taking in other mainstream cryptocurrencies such as XRP, Chainlink, and Litecoin.

Due to their high correlation with Bitcoin, the rise in the prices of these major cryptocurrencies has led to a simultaneous rise in their market capitalizations. In fact, the data for these tokens consistently shows their enthusiasm and optimism in the market .

Profit opportunities in other cryptocurrencies could be a significant motivation for both institutional and retail traders to keep HODLing, which makes Bitcoin unique compared to other alternative assets in a portfolio. Unlike gold, where production doubles to meet demand, Bitcoin’s production is cut in half , which could be the key to exponential price increases that ultimately push Bitcoin’s price to new all-time highs with each halving.

That’s not all either, according to the hourly chart of unspent Bitcoin by Whalemaps, the accumulation of whales with more than 10,000 BTC has exceeded $12,000 and is still continuing. In fact, even at current prices, Bitcoin accumulation by whales continues to increase.

With $18,000 redefining HODLing, more and more traders are reluctant to part with their Bitcoin. While some may argue that this is a result of the challenging financial situation caused by the COVID-19 pandemic, it could equally be a rekindling of trust in the Bitcoin narrative.

If the price of Bitcoin remains above $18,000 for more than 72 hours and continues to rise, Bitcoin will face a new ATH. Moreover, institutions have been preparing for this as well. In fact, the current market value of Bitcoin almost exceeds the combined market value of JP Morgan and Bank of America.

Bitcoin leaving exchanges is a sign of confidence in Bitcoin as an asset and growing trust and maturity , contrary to the 2017 narrative, which seemed to be driven primarily by institutions.