- Bitcoin breaks $30K for the first time in 10 months, but the longevity of this surge is uncertain.
- Traders are examining the balance of Bitcoin on exchanges for clues on whether this trend will continue or decline.
Bitcoin’s recent surge above $30,000 has created both bullish and bearish narratives regarding its future performance. The move is significant as it brings Bitcoin back to pre-implosion levels of major crypto companies.
While there are reasonable explanations on both sides of the trade, traders are looking at the balance of Bitcoin on exchanges for clues on whether the trend will continue or decline. A recent increase in BTC balances on exchanges since March 31, worth $130 million, is a slight cause for concern. The contradiction of narratives has traders focusing on this data to gauge investor sentiment towards Bitcoin’s latest surge.
The movement of Bitcoin prices and exchange balances can provide telling signs of its resiliency and ability to hold prices at higher levels. BTC’s hourly volume, currently surpassing its 20-day moving average, indicates that the move higher is backed by conviction, while daily volume appears poised to do the same.
However, there is a bearish divergence between Bitcoin’s price and its momentum, especially since January. BTC has risen 45% since Jan. 14, but its 14-day Relative Strength Index has fallen 19%. As for Bitcoin’s future, the bullish narrative is that the Federal Open Market Committee will slow interest rate cuts later this year, but Wednesday’s consumer price index report will likely affect investor optimism.
While the recent increase in Bitcoin balances on exchanges is concerning for some, it is worth noting that it marked the end of a decrease in balances that started on March 19. The balance of Bitcoin on exchanges is an indicator of potential price declines as traders position themselves to sell if needed.
Conversely, a decrease in balances can mean investors are placing Bitcoin into cold storage with the hope that it will rise. With Bitcoin back to pre-implosion levels, the future of Bitcoin balances on exchanges may provide clues on how investors view the current move.
Overall, Bitcoin’s recent surge has generated both optimistic and pessimistic views. The movement of BTC prices and balances on exchanges will help clarify the longevity of this trend. With Bitcoin back to where it was before the crypto market’s implosion, investors are eagerly waiting to see if this trend will continue or if it will eventually decline.
