In the past few days, Bitcoin (BTC) has faced some selling pressure, causing its price to hover around $29,000. Despite this, there are indications that a potential bull run is on the horizon. On-chain data analysis reveals intriguing patterns that suggest growing confidence among investors, with the exchange supply reaching a 5-year low. Additionally, its expanding network activity serves as another positive indicator, showcasing renewed interest in the cryptocurrency.
The Declining Exchange Supply
According to data provider Santiment, the number of Bitcoins held on exchanges has dropped to its lowest level since November 2018. This decline in exchange supply indicates that investors are moving their BTC into self-custody, a move typically associated with long-term bullish sentiment.
The fact that the recent drop in Bitcoin’s price below $30,000 did not lead to panic-selling further supports the notion that the market remains optimistic. The decreasing availability of BTC on exchanges could lead to increased scarcity, potentially driving prices higher.
Stability Within a Narrow Range
Despite recent fluctuations, Bitcoin’s price has been trading within a relatively narrow range of $28,000 to $32,000. This remarkable stability is in stark contrast to the significant price swings witnessed in previous years.
The cryptocurrency’s ability to maintain its value within this range suggests a growing maturity in the market, with investors becoming more resilient to short-term price movements. Such stability could pave the way for a sustainable uptrend in the future.
On-Chain Activity Signals Bullishness
Meanwhile, an analysis by popular crypto analyst Ali Charts, using data from Glassnode, reveals a noteworthy uptick in Bitcoin’s on-chain activity. The number of daily new addresses on the Bitcoin network is rising, surpassing the yearly average, and signaling increased network utilization.
For him, such a trend suggests a healthier network and growing usage, indicating rising interest and confidence in Bitcoin. This upswing in on-chain activity could attract new investors and contribute to a potential bull run.
Optimism in the Market
Despite recent price setbacks, traders are expressing more bullish calls than bearish ones. The lack of worry among investors, even after Bitcoin failed to sustainably stay above the psychological support level of $30,000, may indicate a strong underlying belief in the cryptocurrency’s future potential.
Such optimistic sentiment can create positive feedback loops, as it encourages more buyers to enter the market, potentially driving prices higher.
The current market conditions and on-chain indicators suggest that Bitcoin is poised for a potential bull run. The declining exchange supply and Bitcoin’s stability within a narrow price range demonstrate growing confidence among investors. Furthermore, the expanding on-chain activity signals increasing interest and usage of the cryptocurrency.
While the future remains uncertain, the signs on the charts point towards a bullish outlook for Bitcoin in the coming days. As always, investors are advised to conduct their own research and exercise caution when making financial decisions involving cryptocurrencies though as there are other factors that may hinder the fulfillment of the forecasts shown here.
Giancarlo is an economist by profession with a career spanning nearly two decades. His professional journey has seen him assume vital roles in various government and private organizations such as the Department of the Interior and Local Government (DILG), the National Economic and Development Authority (NEDA), Megaworld Corporation, and the China Banking Corporation in the Republic of the Philippines.
In addition to his civic and corporate pursuits, his forward-thinking approach has led him to manage several prominent websites in the banking and finance sector, notably the Australia-based RateChoice, where he immersed himself in the world of emerging financial technologies and where he found particular interest in Bitcoin all the way back to 2013.
Prior to his addition to Blockzeit’s dynamic team, he held an essential role as Project Manager for initiatives encompassing blockchain, stablecoin, mining, special economic zone development, and iGaming. This noteworthy chapter in his career unfolded under the auspices of InPlan Consultancy Services, Inc., the think-tank of IMPERO Consortium Management Corporation headquartered in Manila, Philippines, and Tokyo, Japan. InPlan, led by a distinguished retired Cabinet member of the Philippines, collaborates directly with IMPERO’s core management team, contributing to strategic planning and business development endeavors.