Earlier this week, Bitcoin quickly dropped to $94,500 but steadily climbed back from a low of $99,200 on Friday, surging to $102,666 this morning (the 14th), with an increase of nearly 3.5% during that period. As of the time of writing, it reports $102,066, up about 2.4% in the last 24 hours, challenging the historical high of $104,000.
In terms of Ethereum's price, ETH briefly surged past $3,968 early Saturday morning, but the momentum quickly faded, retreating to consolidate above $3,900. As of the time of writing, it reported $3,917, down about 0.1% in the last 24 hours.
10x Research: Bitcoin supply tightening and exchange balance signals suggest a 'short squeeze' market
It is worth noting that the crypto research firm 10x Research stated today (the 14th) on X that there is an increasing number of claims regarding the 'tightening Bitcoin supply,' particularly as Bitcoin ETFs and MicroStrategy continue to accumulate, leading to a reduction in the available supply of Bitcoin, laying the groundwork for a potential 'squeeze' scenario that could drive BTC prices higher.
On the other hand, the recent significant reduction in Bitcoin balances on exchanges may also fuel a 'squeeze' market. Over the past 30 days, there has been a net outflow of 124,000 Bitcoins from exchanges. Notably, Coinbase, which has the largest Bitcoin reserves, experienced an outflow of 72,000 Bitcoins, almost 10% of its total balance, which currently stands at 748,000 Bitcoins. Binance saw an outflow of 29,000 Bitcoins, with a BTC balance of 570,000. Other major exchanges, such as Gemini, OKX, and Kraken, also showed significant outflows, with Kraken's outflow amounting to about 7-8% of its holdings.
If these trends persist and demand remains strong, the market may face a severe squeeze on Bitcoin supply.
The introduction of Bitcoin ETF options may further exacerbate this situation, potentially triggering additional 'Gamma Squeeze,' thereby amplifying price pressure.
CryptoQuant: Ethereum is expected to challenge the historical high of $5,200
Additionally, according to CryptoSlate, the blockchain analysis platform CryptoQuant reported this week that ETH is expected to break the $5,000 mark for the first time.
On one hand, the 'ETH holdings in Ethereum spot ETFs have significantly surged.' Since their launch in July 2024, the total amount of ETH held by these ETFs in the U.S. has increased from 3.095 million to a record 3.41 million, which may provide significant upward momentum for ETH, pushing the asset close to or even above its historical highs.
On the other hand, Ethereum's total supply has reached 120 million ETH, the highest level since April 2023. The amount of ETH destroyed through transaction fees has grown from an average of 80 ETH per day in August to over 2,700 ETH.
The report believes that this dynamic will create deflationary pressure on ETH, as during periods of increased network activity, the destruction rate may exceed the issuance of new ETH, leading to supply tightness, creating favorable conditions for ETH price increases. Analysts estimate that with ETH's realized price at $2,300, there is potential for ETH to reach $5,200.
