Not just Wall Street: Quant trader explains why Bitcoin price is going up

Thursday 19 November 2020, 10:26 PM AEST - 2 months ago

Sam Trabucco, a quant trader at Alameda Research, believes three general factors are pushing up the price of Bitcoin (BTC).

The catalysts are increasing adoption, whales, inflows from other products into Bitcoin and influence from other markets.

Alameda Research is a major cryptocurrency firm that trades between $600 million and $1.5 billion a day, trading a variety of cryptocurrencies and derivatives.

The weekly price chart of Bitcoin. Source: TradingView.comOverall accumulation and adoption are increasing

Throughout the past month, Cointelegraph has continued to report on the trend of whale accumulation.

Whale clusters form when whales buy Bitcoin and do not immediately sell. This typically indicates that whales bought BTC, sent them to their personal wallets, and have not moved their funds.

The accumulation of Bitcoin from whales possibly synergized with a profit-taking pullback in the altcoin market. Notably, when the decentralized finance (DeFi) market pulled back, Bitcoin continuously saw a significant rally.

Based on various trends and data points, Trabucco said the four above-mentioned factors likely contributed to the Bitcoin rally over the past months. He wrote:

So, first off, why up? Theres been a lot of discourse about this -- some reasons for BTC to go up Ive seen postulated include lots of institutional buying, increased adoption, whales, outflows from faddish products back into BTC, influence from other markets, etc.

Atop these factors, Cointelegraph reported that the Bitcoin exchange reserves are also declining at a rapid rate.

Bitcoin exchange reserves drop when investors increasingly pull their funds out of exchanges. Since investors often deposit cryptocurrencies to exchanges to sell, this trend suggests that there are less fewer sellers in the market and less available supply of BTC.

When positive fundamental and technical factors coi ...

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