Bitcoin underwent significant recovery after a slew of corrections last week. The latest price action pushed the world’s largest crypto asset by market cap above a crucial resistance area, sparking optimism among investors as the ecosystem gears up for another crucial event of the year – halving.
As Bitcoin hovers above $72,000, the uptrend can be attributed to several key factors, according to the latest analysis by CryptoQuant.
Why is Bitcoin Recovering?
After a few weeks of primarily downward movements, Bitcoin jumped above $72,000 for the first time since mid-March. Several factors are at play for this recovery.
When BTC was at $65.500 last week, the price correction was observed to be in the final stages as massive profits amounting to $2.7 billion were realized, suggesting a possible end to the downward pressure. Additionally, the selling pressure weakened as short-term holders ceased realizing losses from the correction.
Moreover, the minting of new USDT coincided with a noticeable correlation between the leading stablecoin’s market cap and Bitcoin price, further supporting the bullish sentiment.
Substantial BTC inflows into accumulation addresses, reaching an all-time high in reserves, indicated increasing interest from long-term investors.
Lastly, a shift in behavior among long-term investors was also observed, with distribution weakening, potentially indicating a stronger conviction in holding Bitcoin for the long haul. These combined factors suggest a positive outlook for BTC’s price recovery.
Crypto experts are confident in the current rally’s sustainability. If the $70,800 level provides the necessary support to Bitcoin’s price, the crypto asset could eye a fresh new record of $85,000, according to analyst Ali Martinez.
More Bitcoin Bullishness?
QCP Capital’s update that was posted last Friday also highlighted a growing bullish sentiment surrounding Bitcoin despite a relatively tight trading range over that week.
For one, there has been a noticeable increase in spot Bitcoin ETF inflows, with significant spikes observed in recent days. The positive headlines regarding prominent traditional finance players like Citadel, Goldman Sachs, UBS, and Citi joining as Authorized Participants for Blackrock’s ETF added further credibility to Bitcoin’s legitimacy.
Additionally, there’s been consistent large buying of BTC calls, indicating a strong preference for Bitcoin among traders. Reduced leverage in BTC, as evidenced by flat perp funding and a lower forward curve, suggested a healthier market environment.
Most importantly, the upcoming Bitcoin halving narrative further added to the positive outlook.
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