- The value of BTC was just under $43,000.
- Market sentiment remained bearish.
Bitcoins [BTC] the price went back to the $43,000 mark at the time of writing.
While we wait for the upcoming halving, which will make BTC scarcer, demand for the coin could also see a surge soon, fueling a bull rally.
So, AMBCrypto planned to take a closer look at what’s going on with Bitcoin.
Should you expect Bitcoin demand to rise?
From CoinMarketCapthe price of BTC fell to $42,226 on February 5. But soon after, the coin started to recover as it was just below the $43,000 mark.
At the time of writing, BTC was trading at $42,861.96, with a market cap of over $840 billion.
Meanwhile, CryptoQuant posted a analysis highlighting some key factors that could potentially cause a shock in BTC supply due to high demand.
According to the analysis of oinonen_t, author and analyst at CryptoQuant, BTC could soon witness an increase in demand.
The main reason behind this was the upcoming halving as it would impact the issuance rate of the coin. In addition, ETFs can also play an important role.
The said analysis,
“The newly opened spot ETF floodgates will create an environment of potential bitcoin supply shocks: about 80% of bitcoin’s circulating supply is liquid and most investors are making large profits, making them less likely to sell.”
In general, an increase in demand is accompanied by an increase in price, because when demand increases and supply remains the same or decreases, the value of that asset increases.
This indicates a bull rally!
Although the possibility of an increase in BTC‘s question seemed likely, AMBCrypto checked other data sets to see if a bull rally was looming.
Mignolet, an analyst and author at CryptoQuant, posted one analysis using BTC’s Binary CDD, a measure used to interpret long-term holders’ movements.
Source: CryptoQuant
According to the analysis, the 182-day moving average of binary CDD data indicates the beginning of a bullish trend, and the green box represents the point in time when the data moves beyond the accumulation phase.
A full upward price cycle will likely be initiated if it significantly exceeds this range.
To see how likely BTC is to start a rally, AMBCrypto analyzed its daily chart. Our analysis showed that BTC‘s Relative Strength Index (RSI) registered an increase from the neutral point.
Moreover, the MACD also showed a bullish edge in the market, indicating that the possibility of a bull rally was high. However, the Chaikin Money Flow (CMF) looked bearish as it fell recently.
Source: TradingView
Interestingly, while BTC’s indicators showed signs of a bull rally, whales seized the opportunity to stock more coins.
Read Bitcoins [BTC] Price prediction 2024-25
AMBCrypto reported rather that in the last six days alone there has been a 2.5% growth in the number of wallets with 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 in Bitcoin’s Weighted Sentiment chart, which plummeted last week.
Source: Santiment