Bitcoin isn't going to retrace all the recent gains and here's why...

Many of the recent big moves up in bitcoin have been spurred by short covering.

Specifically by shorts at Bitmex as well as other derivative exchanges.

However, this recent move up is being mostly driven by the spot markets.

This is a very important difference which will likely help the price from immediately retracing the recent gains.

The other major reason this move up isn't likely to run out of steem has to do with the supply of bitcoin sitting on exchanges...

Or should I say, the lack there of...

Bitcoin continues to be pulled off exchanges at a record pace.

Check it out:

(Source: https://twitter.com/woonomic/status/1324790877944868864/photo/1)

But wait, there's more...

Do you see the rather inverse relationship between the price and the new flows of bitcoin on exchanges?

As the price goes up more and more bitcoin are being pulled from the exchanges.

Which is exactly the opposite of what you would normally see if we were anywhere near a top.

You would see coins flooding into exchanges trying to sell as quickly as they can before the price drops.

The current activity looks like people scooped up a ton of liquidity off of the exchanges and moved it to private wallets.

The really neat thing is that not only are bitcoin being pulled off exchanges but we actually just had the largest outflow of bitcoin than at any other point within the last 5 years...

Check it out:

(Source: https://twitter.com/woonomic/status/1324790883603025920/photo/1)

So, not only is the price going higher and coins a leaving exchanges, but they are leaving in huge amounts.

This is exactly what you would want to see in terms of a move having legs.

Based on this data alone, one could reasonable assume that the move up in bitcoin is just beginning.

Stay informed my friends.

-Doc