Dwindling Bitcoin Supply On Exchanges Could Propel BTC to $70k

Key Points

• Bitcoin’s buying pressure is rising, indicating a possible continued price increase.
• Technical indicators suggest a potential correction despite the bullish sentiment.

Bitcoin [BTC] investors experienced substantial profits last week due to a significant price surge.

This surge led to an increased bullish sentiment around the coin, causing a record drop in BTC’s supply on exchanges. This has led some to speculate about potential further price increases.

Investors are Buying Bitcoin

According to CoinMarketCap, Bitcoin experienced a price increase of over 11% in the past week.

The coin was trading at $67,866.54 at press time, with a market capitalization surpassing $1.34 trillion.

Due to this price increase, more than 50 million BTC addresses were profitable, accounting for more than 94% of all BTC addresses.

Simultaneously, a key Bitcoin metric reached an all-time low. Specifically, Bitcoin’s supply on exchanges dropped to its lowest point in five years, suggesting that investors are buying BTC in anticipation of further price increases.

Bitcoin’s Future Direction

Data from CryptoQuant confirmed that Bitcoin’s exchange reserve has sharply decreased over the past few months, indicating a clear intent among investors to purchase the coin.

Long-term holders showed a willingness to retain their coins, as indicated by the coin’s green binary CDD. The derivatives market also displayed a positive outlook.

However, US investors seemed to have a different perspective, as suggested by the low Coinbase premium. This implies a dominant selling sentiment among US investors, which could potentially halt BTC’s bull rally.

An analysis of Bitcoin’s daily chart reveals that Bitcoin is testing its resistance at the $68k mark. However, market indicators suggest a possible rejection.

For instance, Bitcoin’s price reached the upper limit of the Bollinger Bands, often leading to price corrections.

Furthermore, the Relative Strength Index (RSI) was on the verge of entering the overbought zone. Should this occur, selling pressure might increase, potentially causing a price drop in the coming days.