Bitcoin
Is BTC gearing up for $72,000?
Bitcoin is flat at the time of writing, hovering above immediate support levels and inches away from reclaiming the all-important local settlement line around $66,000. Even as the broader crypto community expects buyers to step in and push prices higher, there are exciting developments that reinforce this outlook.
Billions in BTC withdrawn from exchanges
According to exchange data shared According to an analyst at X, BTC holders are increasingly withdrawing their coins from exchanges.
On July 5, as prices plunged, taking the world’s most valuable currency close to $50,000, a staggering $3.8 billion worth of BTC was moved off exchanges.
BTC leaving exchanges | Source: @Woo_Minkyu via X
Once this happened, prices quickly recovered, rising from as low as $53,500 to $65,000 recorded earlier this week. Although prices have moved horizontally above $62,500 recently, more BTC is being withdrawn. On July 16, BTC owners withdrew another $3.4 billion worth of the coin.
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While there is no clear impact on prices, if past performance bears out, prices are likely to rise, as they did after the collapse to $53,500.
Analysts typically interpret the exchange rate exits as positive for the price. Whenever coin holders move assets to non-custodial wallets, they want to take control of their coins. As such, they may not be willing to sell.
Their decision helps support prices as they won’t sell on demand if they want, as if they were holding them on crypto exchanges like Binance or Coinbase. Furthermore, with fewer BTC readily available on exchanges, bulls stand to benefit due to the increased scarcity.
Is Bitcoin Preparing for Another Rally Above $72,000?
In addition to this development, another analyst notes that the realized profit and loss ratio metric fallen and is at multi-month lows. The metric is used to gauge market sentiment, primarily influenced by profits and losses at any given point in time.
This decline suggests that investors who wanted to exit on highs have already taken profits. For now, traders should expect these metrics to rise, perhaps to multi-month highs, ideally above $72,000 and $74,000, before profit-taking resumes.
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Bitcoin also has recovered their average cost basis of short-term holders (STHs) as prices recover above $62,000. Those who bought in the last 155 days are now in the money. They are likely holding and waiting for further gains in the coming sessions before taking profits.
In the past, whenever the average cost basis was surpassed, CryptoQuant analysts said prices tended to rise by more than 30%.
Featured image by DALLE, chart by TradingView