Major Cryptocurrency Exchanges Are Experiencing Net Negative BTC Inflows Into Their Bitcoin wallet over the past few days, according to on-chain data presented by crypto analytics firm Glassnode.
Inflows into exchange wallets have been mostly positive since mid-February and a reversal could be an indication that sentiment Bitcoin The market is improving.
This is because investors/traders move their Bitcoin exchange wallets when they want to sell (resulting in a net inflow into exchanges), while withdrawing their BTC from exchanges when they want to HODL.
Net exchange flows have a weak correlation with price performance, but some are still interpreting the recent change in flows as another warning sign that Bitcoin The price is on the verge of going above $30,000.
Bitcoin was last changing hands on major exchanges near $28,000, up nearly 70% on the year.
Is Bitcoin About To Vault Above $30,000?
Bitcoin analysts have several other arguments as to why they think BTC price could soon see its next leg to take out $30,000.
Beginning with macro tailwinds, the main driver of last month’s price rise – concerns about a potential bank crisis in the US (and globally) remain, which potentially continue to dampen demand for bitcoin. safe haven,
Meanwhile, weaker-than-expected US data has been released so far in the week ( Production And Service ism report, JOLTS Jobs Data and ADP national employment data) have weighed on the US dollar and US yields, raising bets for a US recession later this year.
This has further fueled the markets Fed tightens further, pulls back its bet on anything – According to CME’s Fed Watch tool, currency markets signal only a 44% chance that the Fed will proceed with another hike next month.
In addition, money markets continue to bet on a rate-cut cycle in the second half of the year.
Bets on a weaker dollar, lower yields and a more dovish Fed have historically boosted crypto prices.
Macro looks set to remain a major bitcoin tailwind, unless upcoming US data (such as Friday’s jobs report) backfires against the US recession narrative and bank positions remain sensitive.
The bitcoin network is showing signs of strength
At the same time as the macro environment becomes more favorable for bitcoin, its underlying network is showing signs of strength.
According to Glassnode, the 7-day moving average number of daily active addresses recently hit its highest level in almost a year at over 1 million.
The 7-day moving average number of new addresses is near its highest level since May 2021.
Meanwhile, the 7-day moving average number of daily transactions rose to its highest level since early 2021 of nearly 350,000.
The strength in bitcoin network activity suggests that more people are using the network, suggesting more demand and higher prices for bitcoin.
Where next for BTC price?
The near-term technical picture for bitcoin is looking a bit mixed. The cryptocurrency is still trading firmly above all of its major moving averages, with the 21DMA offering decent support recently.
Its 14-day relative strength index is also not in overbought territory, suggesting that there is room for upside without the risk of profit-taking getting in the way.
However, things could go either way for BTC, with price action in the recent past forming into a pennant structure that could break out in either direction.
While the fundamentals and on-chain factors discussed above suggest further upside is possible, bitcoin price is seeing a bearish divergence with its RSI, which some take as a bearish signal.
A downside breakout would open the doors for the possibility of a bullish retest of the resistance-turned-support at the $26,500 area and possibly below it the key $25,500 support area, which coincides with the 50DMA.
But dip buyer demand is expected to remain strong
However, in the current market environment, the expectation of any such decline could attract significant demand.
Bitcoin’s recent strong surge from its 200 DMA (and actual price) to just under $20,000 and the “golden cross” seen in early February are very bullish long-term technical signs for the cryptocurrency.
Meanwhile, various long-term focused on-chain indicatorAs grouped in Glassnode’s “Recovering from a Bitcoin Bear” dashboard, all the shining signs are that a new bull market is here.
An analysis of bitcoin’s long-term market cycles also suggests that a new bitcoin bull market is here.
The bitcoin market cycle is roughly four years, according to the bitcoin stock-to-flow pricing model, which shows an estimated price level based on the number of BTC available in the market relative to the amount being mined each year.
Bitcoin is currently fair value of around $55K and could rise above $500K in the market cycle following the next halving – that’s an almost 18x gain from current levels.
Finally, the popular Bitcoin Rainbow chart from Blockchaincenter.net shows that, at current levels, Bitcoin is a “Buy!” The Zone, recently recovered from a late 2022 “basically a fire sale” zone. In other words, the model suggests that bitcoin is slowly recovering from being extremely oversold. During its last bull run, bitcoin was able to reach a “sell”. Seriously, sell! Area.