After reaching $102,747 last week, Bitcoin [BTC] has been trading within a range of consolidation varying between $97k and $92k. Despite attempts by market bears to regain control and push the price downward, bulls have consistently put up resistance.
This resilience has enabled BTC to maintain levels above $90k for the past 39 days. The market’s ability to withstand this pressure can be attributed to an increase in purchasing activity across the market.
Bitcoin sees a peak in Realized Cap comparable to March 2024 figures
As per the analysis by Alphractal, Bitcoin’s realized market capitalization has reached levels of resistance similar to those witnessed in 2019 and March 2024. This increase can be seen as an indication of a sustained surge in purchasing activity, particularly due to rising demand from investors.
Back in March 2024, Bitcoin’s realized cap saw a significant uptrend as BTC’s price escalated to the highest All-Time High (ATH) observed in 2024, with BTC concluding the month at a peak of $71k. Similarly, during the recovery phase from the bear market of 2018, BTC surged from $3k to $13k between February and April 2019. Following the peak in 2019, prices dropped to $7k, and in March, plunged to $56k by April.
These two preceding cycles demonstrate a direct correlation between the rise in realized cap and BTC’s price movement. An increase in realized cap indicates rising buying pressure, even amid surges in price.
This heightened buying pressure is evident through the recent uptick in Bitcoin’s Binance taker buy volume, which has escalated to $8.3 billion. Typically, a surge in taker volume signifies heightened demand, eventually propelling prices upwards.
Over the recent 30-day period, this rise in taker volume has indicated increased investor engagement and reinforced buying pressure.
Considering the growing interest from buyers, it appears that demand remains strong, and Bitcoin’s realized cap is likely to exceed its previous resistance levels.
Hence, a breakthrough by Bitcoin’s realized cap beyond the resistance levels of 2019 and 2024 would lead to further price surges. Failure to do so would result in a decline, indicating that Bitcoin’s annual growth has been substantial.
Interpreting Bitcoin’s chart movements
While the aforementioned analysis leans towards a positive outlook, it’s crucial to explore other market indicators for a comprehensive assessment.
According to CryptoCrypto’s evaluation, Bitcoin is currently showcasing robust market demand.
One evident sign of this demand is the sustained decrease in spot netflows. Over the past month, these figures have dropped from $597 million to $-334.1 million. This decline implies that demand could be outpacing supply, with investors consistently accumulating assets.
Furthermore, a positive Chaikin Money Flow (CMF) indicates mounting buying pressure. This positive trend has persisted since November, indicating strong demand for the crypto as more investors enter the market.
In summary, despite Bitcoin’s realized cap hitting previous resistance levels, the demand for BTC remains substantial. This suggests that Bitcoin still has room for expansion. Should this demand persist and buying pressure continue to drive prices higher, BTC could target $98,900 in the near term.
Conversely, if the annual growth phase has already peaked, Bitcoin’s value might retract towards $92,200.