The cryptocurrency market has been on a good run in recent days, with several large-cap assets posting significant gains last week. Notably, bitcoin price recovered from around $61,000 to over $67,000 for the first time in almost a month.
Unsurprisingly, this latest price movement has sparked a lot of speculation and discussion around the leading cryptocurrency. Popular blockchain analytics firm CryptoQuant has shared on-chain insights into bitcoin's recent price rally and its future trajectory.
How did the price of bitcoin reach $67,000?
In a recent twitter&utm_medium=sns&utm_campaign=dashboard&utm_content=crypto-weekly-report” target=”_blank” rel=”nofollow”>report, CryptoQuant revealed the catalyst and on-chain rallies behind btc's latest rally above $67,000. According to the analysis firm, the price of bitcoin reached new highs thanks to the 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 (CPI) rose 0.3% in April, less than the 0.4% expected. This revelation suggested that inflation could be on a downward slope in the US, making risk assets like bitcoin more attractive.
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twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#bitcoin
Let's see the details
– CryptoQuant.com (@cryptoquant_com) twitter.com/cryptoquant_com/status/1791464886280548617?ref_src=twsrc%5Etfw” rel=”nofollow”>May 17, 2024
In its report, CryptoQuant revealed that there has been less selling pressure in the btc market as short-term holders are selling at low or negative profits. Meanwhile, bitcoin balances on over-the-counter (OTC) desks have stabilized, meaning fewer coins are entering the open market.
What's more, the analytics platform highlighted a particular on-chain signal that could have predicted the recent bitcoin price rally. According to CryptoQuant, btc miners have been very underpaid in recent weeks, which often correlates with lower prices.
The catalysts for btc's sustained rally?
CryptoQuant, in its report, identified possible catalysts for a continued bitcoin price rally. According to the on-chain data company, demand from permanent holders and larger investors is increasing, but must increase rapidly to drive the btc price up further.
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Furthermore, the latest data shows that bitcoin ETF (exchange-traded fund) purchases have dropped to almost zero on a daily basis, while stablecoin liquidity growth is also slowing. CryptoQuant noted that these two metrics need a shakeup, which could be critical to a sustained bitcoin rally.
At the time of writing, the price of bitcoin continues to hover around $67,000, reflecting a 2.5% increase in the last 24 hours. According to data from CoinGecko, the leading cryptocurrency rose a significant 10% last week.
Featured image from iStock, chart from TradingView
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