As an experienced analyst, I believe that the recent consolidation period for Bitcoin (BTC) has been beneficial for the cryptocurrency. The on-chain metrics indicate healthy development ahead, with net capital flows into the Bitcoin network steadily increasing and demand from spot Bitcoin ETFs outweighing new supply from mining.
Bitcoin, the most prominent cryptocurrency globally, hovered near the $68,000 mark after encountering significant resistance at $70,000 in the previous week. Despite this setback, Bitcoin’s price movements have indicated a notable consolidation trend. Meanwhile, underlying Bitcoin network data points to promising advancements.
Bitcoin Futures Demand Bounces Back
Expert insight: Bitcoin analyst Willy Woo shares his perspective on Bitcoin’s market trends, explaining that the 2.5-month long period of consolidation under bullish demand has been advantageous for the cryptocurrency. According to Woo’s analysis, this phase of price stability implies that Bitcoin still holds potential for significant growth before reaching its peak value.
During the consolidation period, the total capital flowing into the Bitcoin network experienced a significant downturn. However, since May, this figure has been on an upward trend. Notably, investments in spot Bitcoin exchange-traded funds (ETFs) have shown a robust rebound over the last two weeks. In fact, BlackRock’s inflows surpassed those of Grayscale recently. The daily demand from these spot Bitcoin ETFs exceeds the amount of new bitcoins mined each day by a substantial margin.
As a researcher, I’ve observed an uptick in interest from futures market participants, notably among individual traders, who have been consistently placing buy orders recently.
As a researcher studying the funding rates for perpetual swaps, I noticed an uptick in retail trader interest, signified by the shaded blue region. It’s important to note that this demand surge isn’t indicative of unsustainably high FOMO levels. Instead, it represents a growing interest in these financial instruments.
In the current stage of consolidation, a significant amount of Bitcoins are being transferred out of cryptocurrency exchanges. This trend coincides with substantial Bitcoin hoarding by large investors, known as “whales.” Consequently, there could be a potential Bitcoin supply shortage in the future, which might result in an increase in the price of Bitcoin.
BTC Resistance and Demand Zones
Bitcoin expert Willy Woo noted that the price of Bitcoin has encountered a major hurdle at the $73,000 mark. In his analysis, Woo pointed out that this level has continued to impede Bitcoin’s price rise.
According to Woo’s assessment, if Bitcoin’s price reaches and exceeds $72,000, there is a significant amount of sell orders waiting to be executed. This could lead to a short squeeze, causing the price to rapidly rise above $75,000 and potentially surpassing its previous all-time highs.
According to Woo’s perspective, it’s just a question of when the underlying market forces will cause Bitcoin prices to compress.
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2024-05-29 09:09