Bitcoin has remained above $60,000 for the past two weeks, holding firm as the crypto market grows. This steady performance boosts confidence among traders and investors alike.
According to important data from CryptoQuant, short-term holders are now selling at a profit, leading to a significant decrease in BTC supply. This reduction in available BTC suggests a possible supply squeeze as demand continues to increase, especially following the recent interest rate cuts by the Federal Reserve.
Top analysts and investors see this as a positive signal, many believe that Bitcoin may be preparing for another big rally. As demand outstrips supply, traders are increasingly optimistic about rising BTC prices in the coming weeks.
However, the important level to watch remains at $70,000—crossing this resistance will provide the necessary confirmation for Bitcoin to continue its upward path. Until then, market participants are carefully watching the charts, waiting for signs of a further breakout.
Bitcoin Supply Suggests Upcoming Rally
Bitcoin has finally taken a decisive step towards higher prices, sparking excitement and caution among traders. While some see this as the start of a new rally, others fear it could be a bull trap, setting the stage for a sharp pullback. The famous on-chain analyst, Axel Adler, responded to this debate, sharing an informative report on X.
Adler highlights that short-term holders (STHs) have moved into profit and started selling their coins, as shown by the green circle on his chart. However, despite this selling activity, the drop in STH supply by 1.31 million BTC suggests a very positive outlook.
A few Bitcoins circulate among STHs, usually associated with regular trading. This drop in supply, combined with more managers’ willingness to HODL, reflects growing confidence in BTC’s long-term strength.
In the chart Adler shared, which shows BTC STHs Supply and Profit Loss Sell metrics, the current STH supply of Bitcoin stands at 3.94 million—much lower than the 5.25 million in April.
This low supply indicates that few short-term sellers are flooding the market, which strengthens the price of Bitcoin. Investors are increasingly optimistic that this drop in supply will push prices higher in the coming weeks, reinforcing the belief that BTC may be on the verge of a new rally.
BTC Technical Analysis: Key Levels to Watch
Bitcoin is trading at $63,617 after a 4% dip, testing the daily 200 moving average (MA) at $63,719 as support. This is an important level for BTC, as the price has struggled to maintain a position above this indicator since early August. Holding this level is important for the bulls to keep the upward momentum alive and to avoid other serious risks.
If the price halves above the daily 200 MA, it can show renewed strength, allowing Bitcoin to recover the $65,000 area. This may set the stage for a strong push to higher supply levels and may initiate a new bullish phase.
However, if BTC fails to hold above this key support, a deeper correction could follow. A failure to close above the 1D 200 MA will open the door to a pullback to demand lows around $60,500, a key support area in the previous correction. Traders and investors are closely watching this level, as the next few days will determine the short-term price action of Bitcoin.
Featured image from Dall-E, chart from TradingView