Bitcoin Exchange Flows Turn Negative – Warning Sign BTC Price Could Be About to Vault Above $30K?
According to on-chain data provided by crypto analytics company Glassnode, major cryptocurrency exchanges have been experiencing net negative BTC flows into their Bitcoin wallets over the previous few days.
Since mid-February, flows into exchange wallets had been primarily positive; the change in trend may indicate that the outlook for the Bitcoin market is improving.
This is due to the fact that traders and investors frequently move their Bitcoin from exchange wallets when they want to HODL, while doing the opposite when they want to sell, which causes net inflows to exchanges.
Although net exchange flows and price performance have a limited link, some are nonetheless viewing the current change in flows as another evidence that the price of Bitcoin is about to soar past $30,000.
On significant exchanges, bitcoin was last trading for over $28,000, up almost 70% year over year.
Is Bitcoin About to Vault Above $30,000?
These more factors support the belief of bitcoin specialists that the BTC price will soon begin its next leg upward to reach $30,000 in value.
Starting with macro factors, which were the primary cause of the price increase last month, demand for Bitcoin as a potential safe haven is still being supported by ongoing worries about a potential bank catastrophe in the US (and around the world).
The US dollar and US rates have been affected as expectations for a US recession later this year have increased as a result of a string of weaker-than-expected US data releases this week, including the manufacturing and services ISM reports, JOLTs Jobs Statistics, and ADP National Employment figures.
Markets have subsequently reduced their bets on any additional Fed tightening as a result; according to the CME’s FedWatch Tool, money markets currently indicate just a 44% chance of the Fed proceeding with one more hike next month.
However, the money markets are still betting that a cycle of rate cuts would start in the second part of the year.
Prices for cryptocurrencies have typically increased with a weaker dollar, lower rates, and bets on a more dovish Fed.
As long as sensitive bank conditions persist and impending US statistics, like Friday’s jobs report, don’t challenge the notion that the US is in a recession, macro appears set to continue to be a significant Bitcoin tailwind.
Bitcoin Network Showing Signs of Strength
The underlying network of Bitcoin is strengthening at the same time that the macro environment is shifting in its favour.
The 7-Day Moving Average Number of Daily Active Addresses recently increased to above 1 million, which is the greatest number in almost a year, according to Glassnode.
Where Next for the BTC Price?
The technical outlook for Bitcoin in the immediate future is a little ambiguous. The 21DMA has recently provided solid support for the Bitcoin price, which is currently trading strongly above all of its key moving averages.
Also, its 14-Day Relative Strength Index is not overbought, indicating that there is room for growth without a high risk of profit-taking getting in the way.
Nevertheless, considering that price action has just formed into a pennant structure that could break out in any direction, things could go either way for Bitcoin.
Although the fundamentals mentioned above and the on-chain indicators indicate further higher is conceivable, Bitcoin’s price has been experiencing adverse divergence with its RSI, which some people see as a bad indication.
The prospect of a quick retest of resistance-turned-support in the $26,500 region and possibly of the crucial $25,500 support zone below that, which coincides with the 50DMA, would be made possible by a negative breakthrough.
But Expect Dip Buyer Demand to Remain Strong
Yet, in the current market climate, anticipate that any such drops will generate a sizable amount of demand.
The “golden cross” witnessed in early February and the current significant bounce of Bitcoin from its 200DMA (and Realized Price) under $20,000 are very bullish long-term technical indications for the cryptocurrency.
The “Recovering from a Bitcoin Bear” dashboard on Glassnode and other longer-term oriented on-chain indicators are all flashing signals suggesting a new bull market is underway.
A new Bitcoin bull market is underway, according to research into Bitcoin’s longer-term market cycles.
The Bitcoin market cycle, as determined by the Bitcoin Stock-to-Flow pricing model, lasts around four years. This model’s anticipated price level is based on the proportion of BTC accessible on the market to the total amount produced annually.
The fair price of bitcoin is currently at $55,000 and may increase to exceed $500,000. This would represent an increase of about 18 times current prices.
Finally, Blockchaincenter.net’s popular Bitcoin Rainbow Chart shows that, at current levels, Bitcoin is in the “BUY!” zone, having recently recovered from the “Basically a Fire Sale” zone in late 2022. In other words, the model suggests that Bitcoin is gradually recovering from being highly oversold. During its last bull run, Bitcoin was able to reach the “Sell. Seriously, SELL!” zone.
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