Last week brought substantial gains for Bitcoin [BTC] investors, with the digital asset’s value soaring by double digits. This surge in price has bolstered optimism among market participants, leading to a notable decline in BTC reserves on exchanges. Could this trend pave the way for further price appreciation?
Rising Investor Interest in Bitcoin
Recent data from CoinMarketCap indicates that Bitcoin experienced an impressive 11% price increase over the past seven days. Presently, the flagship cryptocurrency is trading at $67,866.54, boasting a market capitalization exceeding $1.34 trillion.
Notably, projections earlier suggested a potential breach of the $67k mark for BTC, and the recent price uptick has propelled over 50 million BTC addresses into profit, representing more than 94% of total addresses.
Concurrently, a significant BTC metric has reached a historic low, with Bitcoin’s supply on exchanges hitting its lowest level in half a decade. This decline in available supply signifies heightened investor interest in purchasing Bitcoin in anticipation of further price appreciation.
Consequently, additional datasets were scrutinized by CryptoCrypto to gauge the intensity of buying pressure in the market.
Bitcoin’s Trajectory Going Forward
An analysis conducted by CryptoCrypto using CryptoQuant data corroborated the aforementioned trends. The dwindling exchange reserves for Bitcoin in recent months underscore investors’ clear inclination towards accumulating the primary cryptocurrency.
Evidence of long-term holders retaining their positions is reflected in Bitcoin’s green binary CDD, while positive indicators also emerged from the derivatives market.
The rising funding rate for BTC indicates a prevalence of long position traders who are willing to outbid short traders. Furthermore, the taker buy/sell ratio for Bitcoin signals a prevalent buying sentiment in the derivatives segment.
Nevertheless, a contrasting sentiment was observed among US investors, as evidenced by a subdued Coinbase premium, suggestive of prevalent selling pressure from this region. A potential escalation in selling activity could potentially stifle Bitcoin’s bullish momentum.
As a next step, CryptoCrypto intends to delve into Bitcoin’s daily chart to gain deeper insights into the potential trajectory of the flagship cryptocurrency. Our analysis points towards Bitcoin testing a resistance level at $68k, although prevailing market indicators hint at a potential rejection.
Key signals include Bitcoin’s price nearing the upper threshold of the Bollinger Bands, a trend often associated with price corrections. Furthermore, the Relative Strength Index (RSI) is on the verge of entering the overbought territory, which could trigger heightened selling pressure and subsequent downward price movement in the near term.