Bitcoin enthusiasts are currently witnessing a surge in the market, with the king coin experiencing a significant uptrend during the month of October. This week, Bitcoin achieved a remarkable milestone by surpassing key resistance levels.
On October 16th, Bitcoin reached a peak of $68,424, marking its highest value in almost three months. Michael Saylor, the Co-Founder and Chairman of MicroStrategy, joined the excitement by proclaiming,
“To the moon.”
Saylor’s statement resonated with the positive sentiment prevailing among cryptocurrency enthusiasts, as Bitcoin’s surge reignited confidence and enthusiasm in the market.
Currently, Bitcoin has retraced slightly to $67,458, yet it remains up by 0.97% over the past twenty-four hours and 10% over the course of the week.
Anticipating a Potential Bitcoin Supply Shortage
Alongside the upward price movement, developments in the supply dynamics are fostering expectations of further price appreciation among traders.
Notably, Bitcoin miners are now generating only 450 BTC daily, which is insufficient to meet the growing demand fueled by institutional investors’ continuous accumulation.
For example, BlackRock recently incorporated $391.8 million worth of Bitcoin into its portfolio. On a related note, spot Bitcoin exchange-traded funds (ETFs) collectively hold assets valued at $64.46 billion, constituting 4.82% of Bitcoin’s market capitalization as per SoSo Value data.
Moreover, the circulating supply of Bitcoin stands at 19.77 million, representing 94.14% of the total Bitcoin supply. Additionally, according to CryptoQuant, the Exchange Reserve has dropped to a five-year low of merely 2.6 million BTC.
These factors collectively contribute to the growing likelihood of a potential supply shortage impacting the market in the near future.
Insights from Derivative Data Analytics
To gain a more profound understanding of the Bitcoin market sentiment, CryptoCrypto conducted an analysis of derivative data.
As per CryptoQuant, Bitcoin’s Open Interest (OI) recently reached a record $20 billion, underscoring heightened engagement and interest among market participants.
Furthermore, the Open Interest in CME Bitcoin Futures also surged to an all-time high, indicating a rising level of institutional participation. Moreover, the funding rate was positive at the time of reporting.
Data sourced from Coinglass indicated a Long/Short Ratio of 1.02, showcasing a slight inclination towards long positions. These metrics collectively indicate an overarching sense of optimism prevailing in the market.
Approaching $70K: Bitcoin’s Next Milestone
In the current market scenario, characterized by favorable conditions and Saylor’s ‘moon’ target, the next significant milestone for Bitcoin appears to be in the vicinity of $70,000.
Coinglass’s 6-month liquidation heatmap illustrates a substantial concentration of liquidity at this level, with $72,300 and $72,600 identified as potential attractive zones for price movement.
Interestingly, on the lower end, considerable liquidity is clustered around $67,000 and $65,000. A retracement to these levels might trigger a subsequent upward bounce in the market.
Therefore, given Bitcoin’s current trajectory, bullish investors cling to hope of revisiting and surpassing the all-time high levels achieved earlier in March.