Key Points
- Bitcoin’s buying pressure is increasing, suggesting a potential price hike.
- However, certain technical indicators hint at a possible correction.
Bitcoin [BTC] investors experienced substantial gains last week as the cryptocurrency’s price saw a significant increase. This growth resulted in a bullish sentiment around the coin and a record decrease in BTC’s supply on exchanges.
Increasing Bitcoin Investments
Data from CoinMarketCap showed that Bitcoin’s price increased by over 11% in the past week. At the time of writing, Bitcoin was trading at $67,866.54, with a market capitalization exceeding $1.34 trillion.
This price increase led to over 50 million BTC addresses being in profit, accounting for more than 94% of all BTC addresses. Furthermore, a key BTC metric, the supply of Bitcoin on exchanges, reached a five-year low, indicating that investors were purchasing BTC in anticipation of further price increases.
Bitcoin’s Future Direction
Analysis of data from CryptoQuant confirmed this trend. Bitcoin’s exchange reserve has seen a sharp decrease over recent months, showing a clear intent from investors to purchase the cryptocurrency.
Long-term holders appeared willing to retain their coins, as evidenced by the coin’s green binary CDD. The derivatives market also displayed a positive outlook, with the coin’s funding rate increasing. This suggests that traders holding long positions were dominant and willing to pay short traders.
Despite this, US investors appeared to have a different perspective, as indicated by the low Coinbase premium. This suggests a dominant selling sentiment among US investors, which could potentially halt BTC’s bull rally.
Further analysis of Bitcoin’s daily chart indicated that Bitcoin was testing its resistance at the $68k mark. However, market indicators suggested a possible rejection. For example, BTC’s price touched the upper limit of the Bollinger Bands, which often precedes price corrections.
Furthermore, the Relative Strength Index (RSI) was on the verge of entering the overbought zone. If this occurs, selling pressure may increase, potentially leading to a price drop in the coming days.