Key Points
- Bitcoin’s supply on exchanges has dropped to a 5-year low, indicating a dominant buying sentiment.
- Bitcoin’s Open Interest has soared to a near-record level, suggesting the current price trend may continue.
Bitcoin [BTC] has seen a steady increase over the past week, crossing the $68k mark. However, a short-term trend reversal may be on the horizon, as suggested by a bearish divergence on Bitcoin’s price chart.
Bitcoin’s Strengths
Data from CoinMarketCap shows that Bitcoin’s price increased by over 9% last week, pushing it above $68k. One of the major factors behind this rally could be the decrease in Bitcoin’s supply held on exchanges, which has reached a 5-year low. This suggests a strong buying sentiment in the market, typically a precursor to a price hike.
Moreover, Bitcoin’s Open Interest has hit $20 billion, just 8% below its all-time high. A rise in this metric usually signals a high likelihood of the ongoing price trend continuing.
A recent tweet from Satoshi Club, a popular crypto-related handle, highlighted another significant development. It stated that the supply of Bitcoin held by addresses that bought in the last 12 months is now at a 2-year high, a trend boosted by ETFs seeing inflows of $2.1 billion over the past five days.
Potential Price Correction
Not all indicators are bullish for Bitcoin. A popular crypto analyst, Ali, recently tweeted about a bearish divergence, suggesting a potential short-term price correction.
Analysis of data from CryptoQuant revealed some interesting metrics. Bitcoin’s binary CDD was green, indicating that the movement of long-term holders in the last 7 days was lower than average, suggesting a motive to hold onto their coins.
However, the aSORP suggested that more investors have been selling at a profit, which can indicate a market top in the middle of a bull market. The NULP was also bearish, suggesting that investors were in a belief phase with high unrealized profits.
Looking at Bitcoin’s daily chart, a price correction could result in Bitcoin dropping to $66k. If it slips below that level, it could further drop to $62.8k.