- Thorn revealed bullish narratives and positive fundamentals are emerging for BTC.
- Thorn did note that there has been a drop in BTC’s on-chain liquidity.
- BTC’s price might rise before long-term holders profit, based on on-chain data.
Alex Thorn, the head of Firmwide Research, revealed in a series of X (formerly Twitter) posts yesterday that bullish narratives and positive fundamentals are emerging for Bitcoin (BTC). According to Thorn, the price of BTC could explode in the short term as a “gamma squeeze” has popped up.
He anticipated that BTC could enter into a strong move soon if it climbs higher to between $35,750-$36K, as this will force options dealers to buy $20 million worth of BTC in the spot market for every 1% upside move. Thorn explained that dealers need to perform buy-spot trades to stay delta-neutral when the market does not go their way.
He did, however, reveal in another post that there has been a divergence between the supply of BTC held by long-term holders and the supply moved over the past 24 hours. According to Thorn, this is a sign of decreased on-chain liquidity.
Despite this diminishing liquidity, he maintained a bullish outlook given the 4-year rolling Z-score of the ratio of market price to realized price. Thorn noted that this metric reveals the early formation of a pattern that has preceded several prior bull runs. Subsequently, he speculated that BTC’s price may be in a healthy position structurally.
Long-term holders also seem to be waiting for higher prices before taking profits, given the fact that 70% of BTC’s supply has not moved in the past 1+ years. Furthermore, the compression of relative cost bases between short-term and long-term holders shows a tightening that is reminiscent of other bear/accumulation periods prior to bull markets.
At press time, BTC was up 0.14% and was trading hands at $34,317.59, according to CoinMarketCap. The market leader was also trending and occupied the 3rd position on CoinMarketCap’s trending list.
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