Crypto grounds hit a pivotal point, what comes next remains uncertain.
Bitcoin rallied on Monday, approaching the $110,000 mark, despite geopolitical tensions that surfaced at the end of the week. Remarks made by U.S. President Donald Trump concerning taxes directed at the European Union sent ripples through the markets, but Bitcoin swiftly disregarded the turbulence.
Technical indicators lend support to the uptrend. According to data from CryptoQuant analytics platform, a classic "double bottom" formation has materialized in Bitcoin's chart. This pattern was formed at dip levels of $106,800 and $106,600 on May 23 and 25, respectively. The resistance level for this formation sits at $109,000, and the price has surpassed it, reaching $109,400.
Investment experts view the strong transaction volume accompanying this break as a favorable signal. If the $109,000 level holds, Bitcoin may reach $112,000 in the short term.
On-chain data reveals a divergence in investor behavior. While the price is surging, net inflows from exchanges remain negative, indicating that investors still withdraw their assets from exchanges. Concurrently, the "Taker Buy/Sell Ratio" indicator has dipped below 1, suggesting aggressive selling in the market, with a notable portion probably stemming from individual investors.
However, the lack of large-scale entries hints at the absence of dominant panic selling. Experts suggest that this quiet phase could see large players gradually accumulating. If prices maintain their strength amid selling pressure, a new uptrend might commence as short positions are closed.
As for the broader context, large investors (long-term holders) have been aggressively accumulating Bitcoin. Between March and May 2021, the supply held by long-term holders increased by over 1.39 million BTC, rising from about 14.35 million to 15.74 million. This accumulation activity took place at elevated price ranges around $106,000 to $111,000.
In contrast, retail or smaller individual users appear less influential in the current market movements. The trading volume increase and price growth indicate both retail and institutional interest, but the main on-chain signals suggest that seasoned holders are primarily driving accumulation. The market may soon experience volatility as prices approach all-time highs, despite the sustained dominance of accumulation over distribution. This dynamic reinforces the view that the Bitcoin bull run is still active but may face bumps due to profit-taking and speculative volatility in the near to mid-term.
- The surge in Bitcoin's price, as it breaches the $109,000 resistance level, might be attributed to the interest shown by both retail and institutional investors, but the accumulation activity seems to be primarily driven by seasoned holders who have been aggressively investing in Bitcoin's blockchain technology, as indicated by the on-chain data.
- Despite the approaching $110,000 mark for Bitcoin, the rapid advancement in finance through technology like block chain might trigger significant volatility in the near to mid-term, as suggested by the approaching all-time highs and the persisting dynamic of distribution over accumulation.
