Blockchain
Why did Bitcoin rise 10%? The blockchain company takes action
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Cryptocurrency the market recorded a positive period in recent days, with several large-cap assets posting significant gains over the past week. Notably, the price of Bitcoin rebounded from around $61,000 to over $67,000 for the first time in nearly a month.
As expected, this latest price movement has sparked a lot of speculation and discussion about the leading cryptocurrency. Popular blockchain analytics firm CryptoQuant has shared on-chain insights into Bitcoin’s recent price rally and its future trajectory.
How did Bitcoin price reach $67,000?
In a recent relationship, CryptoQuant revealed the catalyst and on-chain manifestations behind BTC’s latest rally above $67,000. According to the analyst firm, the price of Bitcoin has reached new highs on the back of news of lower-than-expected inflation in the United States.
Inflation data released On Wednesday 15 May it emerged that the consumer price index (CPI) rose 0.3% in April, lower than the 0.4% expected. This revelation suggested that inflation may be trending downward in the United States, making risky assets like Bitcoin more attractive.
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🧵 #BitcoinThe price of rose from $60,000 to around $66,000, driven by lower-than-expected US inflation and reduced selling pressure.
Let’s examine the details ⬇️
— CryptoQuant.com (@cryptoquant_com) May 17, 2024
In its report, CryptoQuant revealed that there has been a decrease in selling pressure in the BTC market, as short-term holders sell at low or negative profits. Meanwhile, Bitcoin balances at OTC counters have stabilized, implying that fewer coins are entering the open market.
Furthermore, the analytics platform highlighted a particular on-chain signal that could have predicted the recent rise in Bitcoin prices. Second CryptoQuantBTC miners have been extremely underpaid in recent weeks, which often correlates with price lows.
Catalysts for a sustained BTC rally?
CryptoQuant, in its report, identified the potential catalysts for a continued rally for the price of Bitcoin. According to the on-chain data firm, demand from permanent holders and major investors is increasing, but it needs to increase quickly to push the price of BTC even higher.
Furthermore, the latest data shows that Bitcoin exchange-traded fund (ETF) purchases have dwindled to almost zero every day, while stablecoin liquidity growth is also declining. CryptoQuant noted that these two metrics need a shake-up, which they might crucial for a sustained Bitcoin rally.
As of this writing, the price of Bitcoin continues to hover around $67,000, reflecting a 2.5% increase over the past 24 hours. According to CoinGecko data, the leading cryptocurrency has risen by a significant 10% over the past week.
Featured image from iStock, chart from TradingView