Bitcoin has remained above $60,000 for the past two weeks, remaining strong as the broader crypto market grows. This regular performance fuels the optimism of traders and investors.
According to key data from CryptoQuant, short-term holders are now selling for profit, leading to a notable decrease in the supply of BTC. This reduction in available BTC suggests a potential tightening in supply as demand continues to increase, particularly following recent interest rate cuts from the Federal Reserve.
Leading analysts and investors view this as a positive signal, with many believing that Bitcoin could be gearing up for another major rally. As demand outstrips supply, traders are increasingly hopeful that BTC prices will rise in the coming weeks.
However, a key level to watch remains $70,000 – breaking through this resistance would provide the necessary confirmation for Bitcoin to continue its upward trajectory. In the meantime, market participants are closely monitoring the charts, waiting for signs of a lasting breakout.
Bitcoin Supply Suggests Coming Rally
Bitcoin has finally taken a decisive step towards higher prices, sparking excitement and caution among traders. While some see this as the start of a new rally, others fear it could be a bull trap, paving the way for a sharp pullback. A prominent channel analyst, Axel Adler, took part in the debate by sharing an insightful report on X.
Adler points out that short-term holders (STH) have made profits and are starting to sell their coins, as indicated by a green circle on his chart. However, despite this selling activity, the decrease in STH supply by 1.31 million BTC suggests a more positive outlook.
Fewer Bitcoins are circulating among STHs, which is often associated with frequent trading. This drop in supply, combined with the desire for more HODL holders, demonstrates growing confidence in the long-term potential of BTC.
In the chart shared by Adler, which shows BTC STH supply and profit loss metrics, Bitcoin’s current STH supply stands at 3.94 million, significantly lower than the 5.25 million of April.
This lower supply indicates that fewer short-term traders are flooding the market, thus strengthening the price of Bitcoin. Investors are growing increasingly optimistic that this decrease in supply will lead to higher prices in the coming weeks, reinforcing the belief that BTC could be poised for another rally.
BTC technical analysis: key levels to watch
Bitcoin is trading at $63,617 after a 4% decline, testing the $200 daily moving average (MA) at $63,719 as support. This is a crucial level for BTC, as the price has struggled to stay above this indicator since the beginning of August. Maintaining this level is essential for bulls to maintain bullish momentum and avoid further downside risks.
If the price halves above the daily 200 MA, it could signal renewed strength, allowing Bitcoin to reclaim the $65,000 zone. This would likely pave the way for a stronger push towards higher supply levels and potentially trigger a new bullish phase.
However, if BTC fails to hold above this key support, a deeper correction could ensue. A failure to close above the 1D 200 MA would open the door for a pullback to lower demand levels around $60,500, a critical support zone during previous corrections. Traders and investors are closely monitoring this level, as the next few days will be decisive for the short-term price action of Bitcoin.
Featured image of Dall-E, chart by TradingView
