Bitcoin’s (BTC) price rebounded above $63,000 on May 10, up 12% in the last 10 days, with BTC supply on exchanges now trending at a monthly low; where could prices head next?
Bitcoin Price Consolidates Above $63k Amid Buyers’ Fatigue
The crypto market rally in May began after US Non-Farm Payrolls rejigged investors’ optimism on imminent rate cuts in 2024. 10 days into the month, the crypto market has maintained its upward trajectory, albeit at a slowing pace.
Bitcoin price broke above $63,000 on Friday, May 10, after having oscillated within the $62,000 – $62,900 narrow channel for the better part of the last 48 hours.
The chart above shows how Bitcoin price extended its monthly gains to 12% as prices climbed to a 24-hour peak of $63,451 on May 10, before tumbling below $62,950 again.
Demand for Bitcoin has weakened significantly, especially since Bitcoin ETFs 4-month streak of consistent capital inflows ended just before the halving in April. More so, fresh post-halving ETF approvals in Honk Kong and Australia have done very little to move the needle in the BTC markets.
Bitcoin (BTC) Holders Cut Market Supply by $320 Million
While bulls await the next major catalyst, existing BTC holders appear to have taken on a resilient stance, which could potentially drive mild price gains in the days ahead.
CryptoQuant Exchange Reserves chart monitors the total supply of BTC coins deposited in exchange-hosted crypto wallets and trading platforms. It essentially provides insights into changes in investors’ sentiment as well levels of active market supply.
Investors held a total of 1,946,225 BTC across various crypto exchanges as the close of May 1. But since the US Bureau of Labor Statistics published the updated Non-Farm Payrolls report on May 2, existing Bitcoin holders appear to have taken on a much more positive outlook on BTC’s long-term price prospects. This outlook is underlined by the persistent decline in Bitcoin exchange supply observed since May 2.
According to the latest data on the CryptoQuant chart above, Bitcoin exchange deposits have dropped to 1,941,094 BTC at the time of writing on May 10.
Effectively, BTC holders have shifted 5,131 BTC from exchanges into long-term storage between May 2 and May 10, 2024. Valued at the current prices, investors have inadvertently removed $320 million worth of BTC from the short-term market supply.
When the market supply of an asset dips during a period of steady demand, it creates a short-term supply squeeze, driving up prices as buyers are forced to up their bids marginally. Unsurprisingly, Bitcoin price has recorded a 12% uptick during that period.
More so, historical patterns suggest the BTC is likely to continue advancing towards $65,000 if exchange supply declines further.
BTC Price Forecast: Bitcoin to Stay Above $60k Despite ETF Outflows
Bitcoin price struggled to advance above $63,000 this week as Bitcoin ETF inflows slowed considerably. But with $320 million less BTC available to be traded on exchanges, Bitcoin price looks set to avoid a major downswing below $60,000 in the days ahead.
IntoTheBlock global in/out of the money chart below also affirms an optimistic Bitcoin price forecast.
The chart above shows that BTC has a major support cluster at the $62,000 territory. At that price level, 1.3 million addresses purchased 784,550 BTC at an average price of $61,563.
With the decline in the BTC exchange supply, bears currently have a slim chance of generating sufficient sell-pressure to flip that $48 billion support cluster.
Conversely, any BTC price breakout in the near term could meet major resistance at the $65,000 level. In effect, as BTC heads into the weekend, further consolidation within the $62,000 – $65,000 appears to be the more likely outcome.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.