Following the recent surge in the price of Bitcoin, several factors such as crowd sentiment have been cited as a major reason for the surge. However, market expert Axel Adler Jr has delved in the article, we note that the recent and previous price increases are mainly due to supply and demand.
Supply And Demand Dynamics Control Bitcoin’s Market
According to Santiment, the leading market intelligence platform, the positive outlook for Bitcoin is witnessing a significant rise reaching the highest point of the year, investors with traders expecting the digital asset to reach the $70,000 price level soon.
This increase in positive sentiment comes after BTC experienced an increase of more than 22% in the last 3 weeks. As a result, crypto enthusiasts and investors are currently watching the development closely to see how it will affect BTC’s price trajectory in the coming months.
However, Santiment spoke to this great desire, highlighting that Bitcoin reach a new for all time In the coming months, crypto assets may have to wait until the crowd’s expectations have subsided. In addition, the intelligence platform noted that there are currently 1.8 posts about BTC positive and 1 negative, indicating strong optimism among investors and market participants. “Historically, markets have always gone against what the crowd expected,” added the platform.
Although Santiment believes that the next upward movement of Bitcoin may rely on the reduction of positive crowd sentiment, Axel Adler Jr, an on-chain researcher and senior researcher argues that the development does not primarily affect the BTC market.
In response to this post, the researcher asserted that the fundamentals of supply and demand largely drive price movements BTCrather than the positive attitude expressed by the masses. “The key factors that drive the market are supply and demand at all times,” he said.
While social media can act as a signal to market participants, Adler says it doesn’t necessarily cause actual actions in the market. Adler’s insight suggests that these forces will continue to influence BTC’s price pattern in the long term, despite the market’s short-term reaction.
BTC Sees Supply Gain Growth
In a recent study, analysts of the on-chain data platform, CryptoQuant went report that the supply of Bitcoin with profit has remained at high levels, which shows that this is a large amount BTC holders they still benefit.
According to CryptoQuant, considering previous cycles, the profit margin on BTC supply in particular has remained above 80%. This continued maintenance of supply gains is a key indicator of whether or not a bull cycle is continuing.
Although there have been a few cases where profits have fallen below 80%, CryptoQuant noted that it has remained above 80% in most cases in the ongoing bull cycle. Meanwhile, in those times when it dropped below a percent, the platform identified itself as a buying opportunity.
Featured image from Unsplash, chart from Tradingview.com