bitcoin has remained above $60,000 for the past two weeks, staying strong as the broader crypto market expands. This consistent performance is fueling optimism among traders and investors alike.
According to key data from CryptoQuant, short-term holders are now selling for profits, leading to a notable decline in btc supply. This reduction in available btc suggests a possible reduction in supply as demand continues to increase, especially after recent interest rate cuts by the Federal Reserve.
Top analysts and investors see this as a positive sign, and many believe that bitcoin could be gearing up for another big rally. As demand outstrips supply, traders are increasingly hopeful of an increase in btc prices in the coming weeks.
However, a key level to watch remains $70,000; Overcoming this resistance would 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 Suggests Coming Rally
bitcoin has finally taken a decisive step towards higher prices, generating excitement and caution among traders. While some see this as the start of a new rally, others fear it could be a bullish trap, setting the stage for a sharp pullback. A prominent network analyst, Axel Adler, intervened in the debate and shared a x.com/AxelAdlerJr/status/1840674875741962310″ target=”_blank” rel=”noopener nofollow”>revealing report on x.
Adler highlights that short-term holders (STH) have taken profits and are starting to sell their coins, as indicated by a green circle on his chart. However, despite this selling activity, the decline in STH supply by 1.31 million btc suggests a more positive outlook.
Fewer Bitcoins circulate among STHs, which is often associated with frequent trading. This drop in supply, combined with the readiness of more HODL holders, indicates growing confidence in btc's long-term potential.
In the chart Adler shared, showing btc STH supply and profit loss selling metrics, the current bitcoin STH supply is 3.94 million, significantly down from 5.25 million in April.
This lower supply indicates that fewer short-term traders are flooding the market, strengthening the price of bitcoin. Investors are increasingly optimistic that this decline in supply will drive prices higher in the coming weeks, reinforcing the belief that btc could be on the verge of a new rally.
btc Technical Analysis: Key Levels to Watch
bitcoin is trading at $63,617 after a 4% drop, testing the 200 daily moving average (MA) at $63,719 as support. This is a crucial level for btc as the price has struggled to maintain a position above this indicator since early August. Maintaining this level is essential for the bulls to keep the bullish momentum alive and avoid further downside risks.
If the price halves above the 200 daily MA, it could signal renewed strength, allowing bitcoin to reclaim the $65,000 area. This would likely set the stage for a stronger push towards higher supply levels and potentially trigger a new bullish phase.
However, if btc fails to hold above this key support, a deeper correction could ensue. Failure to close above the 1D 200 MA would open the door for a pullback to reduce demand levels around $60,500, a critical support zone in previous corrections. Traders and investors are closely monitoring this level as the next few days will be decisive for bitcoin's short-term price action.
Featured image of Dall-E, TradingView chart
