Bitcoin’s (BTC) price has surged to $67,500 amidst notable shifts in the cryptocurrency market. This is in line with the general observation that institutional investors are buying more, and there is a declining supply of centralized exchanges. At press time, BTC was trading at $67,379, a 0.38% decline from the 24 hour high.
Shrinking Bitcoin Supply on Exchanges
Santiment on-chain data show that Bitcoin supply on centralized exchanges has decreased dramatically and is now at its multi-year low of approximately 942,000 BTC. This decline indicates a pattern of accumulation by long-term holders, which means the amount of currency supply in the market is decreasing.
This decrease in exchange reserves of Bitcoin is usually considered as a bullish signal since investors keep their coins because they expect the price to rise.
The recent Bitcoin halving has only contributed to this by lowering the coin’s annual inflation rate to below 2%. This event happens roughly every four years and halves the reward given to miners for mining new blocks of Bitcoin, thereby slowing down the creation of new coins. This supply-side shock has been associated with price rises in the past because when supply is constrained and/or demand continues to rise, prices are likely to rise.
Institutional Investment and ETF Approvals
Having approved several spot Bitcoin ETFs in different jurisdictions has affected the market structure of Bitcoin in a big way. These ETFs have hodl close to 1 million BTC and hold about 5% of the total BTC supply.
Of particular interest, Fidelity’s FBTC has emerged as the best-performing U.S. spot Bitcoin ETF regarding cash inflows, signaling institutional demand. In a single day, for instance, FBTC received an inflow of $50. 6 million, thus resulting in a net inflow of approximately $100. 8 million for US spot Bitcoin ETFs.
This is evidenced by the entry of institutional players into the market, such as Brazil’s largest bank, Itau Unibanco, which introduced crypto trading services to all its clients. This is a pattern of enhancement of the legal framework globally, which is compelling more of the conventional financial institutions to start involving with cryptocurrencies.
Whale Activity and Market Volatility
Crypto whales have recently used the market downturn to scoop up more coins. Data from CryptoQuant shows that in the last several days, more than 20,000 BTC has been transferred to whale addresses. This activity is a form of strategic buying by the whales in periods of increased volatility with a view of making more profits in the future.
This was most apparent on June 11 when whales purchased a total of 20,600 BTC valued at $1.38 billion as Bitcoin dropped. This inflow was the highest single-day contribution by whales since February 28, indicating their confidence in the asset’s future.
Other than such technical factors, some fundamental factors also boost the current crypto-bullish sentiment. Expectations of lower interest rates in the US and similar actions of the European Central Bank (ECB) and the Bank of Canada support risk assets, including Bitcoin. Upcoming elections in the U.S. are also affecting market expectations, with policy changes likely affecting markets.
$BTC Descending Broadening Wedge on the Daily Timeframe Chart is Still in Play.
Bitcoin bulls need to clear the $71.3k Resistance to confirm the breakout.
Once the wedge breakout happens, the bulls’ party will start. 🔥📈#Crypto #Bitcoin #BTC pic.twitter.com/uqsQGVcEaH
— Captain Faibik (@CryptoFaibik) June 13, 2024
The price of Bitcoin has been oscillating within the range of $61,000 to $72,000 in the past four months. Cryptocurrency analysts claim that Bitcoin has to hold above $72,000 for the price to rise to $90,000. However, this has not moved the market beyond $67,500, and the market is awaiting the signs of a clear break out to the new highs.
