Bitcoin has remained above $60,000 over the past two weeks, maintaining its strength as the broader cryptocurrency market swells. This consistent performance fuels optimism among traders and investors alike.
According to key data from CryptoQuant, short-term Bitcoin holders are now selling to make a profit, leading to a noticeable decrease in the supply of Bitcoin. This reduction in available Bitcoin indicates a potential pressure on supply as demand continues to rise, especially after recent interest rate cuts by the Federal Reserve.
Leading analysts and investors see this as a positive sign, as many believe that Bitcoin may be poised for another major rally. With demand outpacing supply, traders are increasingly hopeful that Bitcoin prices will rise in the coming weeks.
However, the key level to watch remains $70,000, as a breakout of this resistance will provide the necessary confirmation for Bitcoin to continue its upward trajectory. Until then, market participants are watching the charts closely, waiting for signs of a sustained breakout.
Bitcoin supply indicates an upcoming rally
Bitcoin has finally taken a decisive step toward a price rally, sparking excitement and caution among traders. While some see this as the beginning of a new rally, others fear it is a trap for the revolution, paving the way for a sharp pullback. One of the leading analysts on the series, Axel Adler, participated in the discussion and participated Featured report on X.
Adler highlights that short-term holders of tokens (STHs) have moved into profit and begun selling their cryptocurrencies, as shown by a green circle on his chart. However, despite this selling activity, the decrease in STH supply by 1.31 million BTC indicates a more positive outlook.
Fewer bitcoins are traded between STHs, often associated with frequent trading. This decrease in supply, combined with more holders wanting HODL, indicates growing confidence in BTC’s long-term potential.
In a chart shared by Adler, which shows bid and sell metrics at a loss for BTC STH, the current supply of Bitcoin STH is 3.94 million — well below the 5.25 million in April.
This lower supply indicates that fewer short-term traders are flooding the market, boosting Bitcoin’s price. Investors are increasingly optimistic that this reduced supply will lead to higher prices in the coming weeks, reinforcing the belief that Bitcoin may be on the verge of a new high.
Bitcoin Technical Analysis: Key Levels to Watch
Bitcoin is trading at $63,617 after a 4% decline, testing the 200 daily moving average (MA) at $63,719 as support. This is a crucial level for Bitcoin, as the price has been struggling to maintain its position above this indicator since early August. Holding this level is essential for bulls to maintain bullish momentum and prevent further downside risks.
If the price halves above the 200 daily moving average, it could signal renewed strength, allowing Bitcoin to reclaim the $65,000 area. This is likely to pave the way for a stronger push towards higher supply levels and possibly lead to a new bullish phase.
However, if Bitcoin fails to hold above this key support, a deeper correction may follow. Failure to close above the 1D 200 MA will open the door for a pullback to lower demand levels around $60,500, a crucial support area in previous corrections. Traders and investors are closely monitoring this level, as the next few days will be crucial for Bitcoin’s price movement in the short term.
Featured image by Dall-E, chart from TradingView