The cryptocurrency market has been on a hot streak in the past few days, with several large-cap assets recording significant gains in the past week. Notably, the price of Bitcoin rebounded from around $61,000 to over $67,000 for the first time in about a month.
As expected, the recent price movement has sparked a lot of speculation and discussion about the leading cryptocurrency. Popular blockchain analytics firm CryptoQuant has shared insights into the recent rise in Bitcoin prices and its future trajectory.
How did the price of Bitcoin reach $67,000?
at recent days a reportCryptoQuant has revealed the catalyst and on-chain manifestations behind BTC's recent surge above $67,000. According to the analytics firm, the price of Bitcoin rose to new highs on the back of news of lower-than-expected inflation in the United States.
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Inflation data released on Wednesday, May 15 showed that the Consumer Price Index rose 0.3% in April – below expectations of 0.4%. This revelation suggests that inflation may be on a downward slope in the US, making risky assets like Bitcoin more attractive.
🧵 #Bitcoins price rose from $60,000 to around $66,000, driven by lower-than-expected US inflation and lower selling pressure.
Let's look at the details ⬇️
— CryptoQuant.com (@cryptoquant_com) May 17, 2024
In its report, CryptoQuant revealed reduced selling pressure in the Bitcoin market, with short-term Bitcoin holders selling at low or negative profits. Meanwhile, Bitcoin balances on over-the-counter (OTC) desks have stabilized, implying that fewer coins are entering the open market.
Furthermore, the analytics platform highlighted a particular on-chain signal that may have predicted Bitcoin's recent price surge. According to CryptoQuant, BTC miners have been underpaid over the past few weeks, which is often linked to the price bottom.
What are the catalysts for a sustained BTC rally?
In its report, CryptoQuant identified potential catalysts for the continued rise in the price of Bitcoin. According to the on-chain data company, demand from permanent holders and large investors is on the rise but needs to rise quickly to push the price of BTC higher.
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Moreover, the latest data shows that Bitcoin ETF (exchange-traded fund) purchases have dwindled to nearly zero daily, while stablecoin liquidity growth is also declining. CryptoQuant noted that these two metrics need a shake-up, which could be crucial for Bitcoin's continued rise.
As of this writing, Bitcoin's price is still hovering around $67,000, reflecting a 2.5% increase over the past 24 hours. According to CoinGecko data, the major cryptocurrency has risen by a whopping 10% in the past week.
Featured image from iStock, chart from TradingView
