Bitcoin has stabilized above $55,000 while maintaining a market cap of $1 trillion for 27 of the last 30 days, and may be about to rally, an analyst believes.

Investors appear to be buying and holding Bitcoin in anticipation of future price gains.

Lennard Neo, a certified financial analyst and head of research at Stack Funds in Singapore, said the number of Bitcoins transferred from exchanges hit a one-year high since the “flash crash” in 2020, when the cryptocurrency’s price dropped about $1,500 in an hour.

lennerd neo stack funds
Lennard Neo, head of research, Stack Funds, Singapore (Photo credit: stackfunds.com)

“The spikes in Bitcoin outflows from exchanges typically coincides with upside price action in the following days, as investors continue to accumulate during the dips of this bullish market cycle,” he said in a research report.

“We expect a similar outcome to unfold this time as well. Bitcoin exchange outflows have currently spiked above the 100,000 level, and during 2020, there were only five occurrences,” the report said. “However, since the start of 2021, this has happened four times in the short span of a few months. The evidence suggests that investors are not only buying the dip, but also accumulating Bitcoins at a faster rate.”

Neo said the Bitcoin network continues to expand and mainstream adoption continues to grow, creating increased demand for the cryptocurrency and likely driving prices higher.

“For those critics who still think that Bitcoin has no intrinsic value and will not emerge into an asset class, we sincerely urge them to think out of the box,” he said.

Major companies continue to invest in Bitcoin, underscoring the cryptocurrency’s growing mainstream acceptance. Electric carmaker Tesla and software developer Microstrategy have invested in Bitcoin, and top Wall Street firms now offer exchange-traded funds to their clients.

The New York Digital Investment Group (NYDIG), a division of Stone Ridge Holdings Group and a provider of Bitcoin investment tools, on Thursday said it had raised $100 million in from property and casualty insurers Starr Insurance, L