The price of Bitcoin has experienced a significant surge, rising from $60,000 to approximately $66,000, according to recent insights from CryptoQuant. This upward movement can be primarily attributed to lower-than-expected US inflation rates and a notable decrease in selling pressure within the market.
One of the key factors contributing to the surge in Bitcoin’s price is the behavior of short-term holders, as noted by CryptoQuant. These investors have been selling their holdings at low or even negative profits, which has resulted in an overall reduction in selling pressure. Additionally, many traders have exhausted their unrealized profits, further contributing to the current stability of the market.
Furthermore, the balances of Bitcoin at over-the-counter (OTC) desks have stabilized, indicating a decrease in the supply of Bitcoin entering the market. This stabilization is a positive indicator for the price, suggesting that fewer Bitcoins are being sold off. Additionally, Bitcoin miners are experiencing low profitability, which historically correlates with price bottoms. This low profitability among miners may also be playing a role in the current price dynamics.
While the demand from permanent holders and large investors has shown signs of stabilization, it needs to accelerate for the rally to be sustainable, according to CryptoQuant. The involvement of these major market participants is crucial for maintaining the upward momentum of Bitcoin’s price.
Despite the positive price movement, there are some areas of concern that could impact the sustainability of this rally. ETF Bitcoin purchases remain near zero, indicating that institutional interest through this channel has not yet picked up. Additionally, the growth of stablecoin liquidity, which is essential for providing the necessary market liquidity for further price increases, is still slowing.
In conclusion, Bitcoin’s recent rally to $66,000 has been driven by a combination of reduced selling pressure, stabilization in supply, and the influence of macroeconomic factors such as US inflation rates. While the current market conditions are favorable, the future trajectory of Bitcoin’s price will depend on the acceleration of demand from long-term holders and large investors, as well as improvements in ETF purchases and stablecoin liquidity growth.
