- BTC’s value was resting just under the $43,000 mark.
- Market sentiment remained bearish.
Bitcoin’s [BTC] price went back to inching towards the $43,000 mark at press time.
As we await the upcoming halving, which will make BTC more scarce, the coin’s demand might also soon witness an increase, which can fuel a bull rally.
So, AMBCrypto planned to take a closer look at what’s going on with Bitcoin.
Should you expect Bitcoin’s demand to rise?
As per CoinMarketCap, BTC’s price fell to $42,226 on the 5th of February. But soon after that, the coin started to recover, as it was sitting just below the $43,000 mark.
At the time of writing, BTC was trading at $42,861.96, with a market capitalization of over $840 billion.
Meanwhile, CryptoQuant posted an analysis highlighting a few key factors that could potentially cause a shock in BTC’s supply because of high demand.
As per oinonen_t’s analysis, who is an author and analyst at CryptoQuant, BTC’s might soon witness an increase in demand.
The major reason behind this was the upcoming halving, as it would have an impact on the coin’s issuance rate. Additionally, the ETFs could also play a major role.
The analysis mentioned,
“The recently opened spot ETF floodgates will create an environment of potential bitcoin supply shock: Approximately 80% of bitcoin’s circulating supply is liquid and most of investors are heavily in profit, thus they’re less likely to sell.”
Generally, a rise in demand is accompanied by a hike in price, as when demand increases and supply remains the same or drops, the value of that asset surges.
This hints at a bull rally!
Although the possibility of a rise in BTC’s demand seemed likely, AMBCrypto checked other datasets to find whether a bull rally was around the corner.
Mignolet, an analyst and author at CryptoQuant, posted an analysis using BTC’s Binary CDD, which is a metric used to interpret long-term holders’ movements.
Source: CryptoQuant
As per the analysis, the 182-day moving average of binary CDD data indicates the beginning of a bullish trend, and the green box represents the time at which the data advances past the accumulation phase.
A complete upward price cycle is likely to be initiated if it significantly exceeds this range.
To see how likely it is for BTC to start a rally, AMBCrypto analyzed its daily chart. Our analysis revealed that BTC’s Relative Strength Index (RSI) registered an uptick from the neutral mark.
Additionally, the MACD also displayed a bullish advantage in the market, indicating that the possibility of a bull rally was high. However, the Chaikin Money Flow (CMF) looked bearish as it went down lately.
Source: TradingView
Interestingly, while BTC’s indicators showed signs of a bull rally, whales nabbed the opportunity to stockpile more coins.
Read Bitcoin’s [BTC] Price Prediction 2024-25
AMBCrypto reported earlier that in the last six days alone, there has been a 2.5% growth in the number of wallets holding balances between 1,000 and 10,000 BTC.
However, it was surprising to see that, despite so many optimistic developments, sentiment around the coin remained bearish. This was evident from Bitcoin’s Weighted Sentiment chart, which plummeted last week.
Source: Santiment