Bitcoin (BTC) surged once again, reaching as high as $59,597 early Friday, marking a notable recovery in its price from Tuesday’s lows of about $56,900.
Notably, the rally, supported by increased accumulation from retail investors, comes at a time when market sentiment appears to be shifting toward optimism. According to data from crypto analytics firm Santiment, wallets holding less than 1 BTC now contain their highest supply ratio so far this year, signaling increased confidence from smaller investors.
“Bitcoin has reached as high as $58K today, with sentiment among retail traders beginning to look a bit more positive. Wallets with [less than] 1 BTC now hold their highest ratio of supply in 7 months,” the firm tweeted on Wednesday.
The firm, however, emphasized that for Bitcoin to reach new all-time highs, certain market dynamics would need to shift. Specifically, it outlined that holders with less than 1 BTC must decrease gradually, while wallets containing between 1 and 100 BTC must experience steady growth. Furthermore, it suggested that holders of 100 or more BTC should continue accumulating to propel the market upward aggressively.
Despite the optimism, some analysts note that Bitcoin’s current rally could face challenges. Notably, Julio Moreno, a prominent crypto analyst from Cryptoquant, recently pointed out that Bitcoin’s recent price fluctuations are closely tied to demand, which appears to be declining.
“The Bitcoin price is down simply because there is no demand growth,” Moreno observed, adding, “Basically, all valuation metrics are in bearish territory.”
The pundit further established a stagnation in demand for BTC, noting that the “trader realized number” of Bitcoin hadn’t moved in over a year. He likened it to monitoring inventory movements in traditional commodities markets, where reduced activity signals lower demand.
Despite this cautionary outlook, other experts are more bullish. CryptoQuant analyst “Tarekonchain” shared a different perspective, suggesting that Bitcoin may be on the verge of another major bull run. He noted several positive market indicators, including declining exchange reserves for Bitcoin.
“This reduction signals reduced selling pressure as investors move Bitcoin to cold storage, limiting the available supply,” he explained.
Interestingly, on-chain reveals that over the past two months, approximately 236,155 BTC, valued at around $14.22 billion, have been withdrawn from crypto exchanges. This significant outflow indicates reduced selling pressure, potentially setting the stage for a strong upward movement in Bitcoin’s price.
Additionally, exchange stablecoin reserves are rising, indicating that traders may prepare to buy. The combination of decreasing Bitcoin supply and increasing stablecoin reserves suggests that the market could be poised for a bullish breakout.
“The shrinking Bitcoin reserves and rising buying power set the stage for a potential upward move,” Tarekonchain noted.
BTC was trading at $59,884 at press time, reflecting a 0.27% surge over the past 24 hours.
