Bitcoin price is about to explode beyond $100,000, suggests on-chain metric

  • Bitcoin is likely to rally to levels above $100,000 if history repeats with the market cap-to-thermocap ratio.
  • The Canadian securities regulator leads the way by approving the first North American BTC ETF product.
  • SEC Commission's Hester Peirce says that the market is ready for a Bitcoin ETF product.
  • India to go ahead with the proposed ban on cryptocurrencies but to allow investors a transition period.

Bitcoin made a run for $50,000 this week but stalled at $48,000. The upswing was followed by a reversal, confirming new support at $44,000. Meanwhile, the resistance at $48,000 is still in place while the flagship cryptocurrency exchanges hands at $47,640. According to a unique on-chain metric, BTC's uptrend is still intact and could hit highs above $100,000.

Bitcoin market cap-to-thermocap ratio predicts rally above $100,000

Glassnode describes this metric as a market cap divided by the thermocap. It reveals instances where Bitcoin is exchanging hands at a premium in relation to the total security miners spend. Note that the resulting ratio is adjusted to account for an increase in circulating supply over time.

According to a prominent analyst, Rafael Schultze, in the previous bull run, BTC exchanged hands at $8,500, but its market cap-to-thermocap ratio was at the prevailing levels. Notably, the bellwether cryptocurrency rallied roughly 135% in less than 30 days.

This insinuates that the market is dynamic and things can move fast. However, if Bitcoin were to rally by the same 135%, it could spike to highs above $100,000.

Bitcoin market cap to thermocap ratio

Bitcoin market cap-to-thermocap ratio

Santiment's NVT Token Circulation model also reinforces the bullish narrative. As explained, this metric relates the change in the rise of the market cap to the tokens exchanging hands on the network. Bitcoin's NVT model is exceptionally bullish at the moment, in addition to the semi-bullish outlook over the last five months.

Bitcoin's NVT model

Bitcoin's NVT model

Canadian securities regulator approves first Bitcoin ETF

The Ontario Securities Commission (OSC) has approved the first Bitcoin exchange-traded fund (ETF) in North America. The proposal was filed under the Multilateral Instrument passport system in various Canadian jurisdictions.

According to a fact sheet shared by Purpose Investment, the ETF has proposed to duplicate BTC price action without including the fund's fees and related expenses. Moreover, this Bitcoin ETF will not be involved in the speculation of short term price changes.

With Canada having approved the first Bitcoin ETF in North America, the United States may consider a similar product. Several proposals were rejected in 2019 and early 2020 by the Securities and Exchange Commission (SEC). Meanwhile, the SEC Commissioner, Hester Peirce, believes that the market is primed for a Bitcoin ETF.

If we don't give them (investors) the natural way, which I think would be an ETP, they are going to look for other (less optimal) ways to do it.

Bitcoin prepares for a technical upswing

The bellwether cryptocurrency is trading $47,640 as bulls push for gains above $48,000. Trading above this zone will be a bullish signal, perhaps strong enough to lift Bitcoin above $50,000 and set it on the trajectory for gains eyeing $100,000.

However, the Relative Strength Index (RSI) on the 4-hour chart suggests that consolidation will occur before BTC spikes to higher highs.

BTC/USD 4-hour chart

BTC/USD 4-hour chart

Looking at the other side of the picture

If Bitcoin fails to overcome the resistance at $48,000, selling pressure is likely to increase as bulls get exhausted. Support at $44,000 prevented the pioneer cryptocurrency from diving further. However, if retested, it may weaken, allowing losses to progress towards $40,000.

India is set to continue with the ban on cryptocurrency investment

India is adamant in regard to letting its citizens engage in crypto-related activities. The proposed complete ban will go on as planned. However, the government will give investors a transition period of about three-to-six months. According to Bloomberg Quint, the Indian bill will have some exceptions:

The Bill also seeks to prohibit all private cryptocurrencies in India; however, it allows for certain exceptions to promote the underlying technology of cryptocurrency and its uses.

India's parliament is ready to impose the ban and prohibit any engagement with cryptocurrencies, including transactions with foreign exchanges.

Depending on how soon the complete ban is ascended to law, Bitcoin may suffer under heavy selling pressure. India is among the world's largest populations and a sizeable number of people engage in cryptocurrency trading and other businesses. The transition period will only give people time to sell their digital assets, which will negatively impact Bitcoin and hinder the projection to $100,000.

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