Following a significant sell-off triggered by FTX’s crypto liquidation news, Bitcoin is now showing signs of a recovery rally. In recent hours, the price of BTC has been climbing steadily, fueled by renewed investor interest in buying the dip. Additionally, current on-chain data points toward the potential for a sharp upward trend for Bitcoin by month’s end.
This Metric Might Skyrocket Bitcoin
Amid the demotivating sentiment of the cryptocurrency market, there’s rising bullish data surrounding Bitcoin (BTC), setting the stage for a possible significant price surge. Recent data from Blockware Solutions and Glassnode indicate that only 5.4% of Bitcoin’s circulating supply was active on-chain in the past month, hitting a new record low. This suggests that less trading is occurring, which often signals a weak supply side. As of the latest reports, Bitcoin’s circulating supply stands at 19.48 million.
Blockware Solutions said, “Price is set at the margin, which means those who trade Bitcoin back and forth drive short-term price action. As supply-side illiquidity continues to increase, as indicated by fewer supply exchanging hands, any demand catalyst will send the price skyrocketing.”
Approximately 70% of the circulating supply has been dormant for more than a year, indicating a strong “buy and hold” sentiment in the market. Glassnode notes that so-called long-term holders, defined as addresses retaining coins for a minimum of 155 days, control over three-quarters of the circulating supply.
Whales are actively shifting large volumes of Bitcoin, contributing significantly to the upward momentum in BTC price. On-chain statistics show that in the past 48 hours, more than 1.4 million BTC have been transferred. Analysts interpret this high-volume activity as an indicator of a potential bullish surge, setting the stage for September to conclude on a bullish note.
What’s Next For BTC Price?
The Bitcoin price has experienced a significant uptick in recent hours, rising from a low of $26,000 as buyers stepped up their efforts. Despite this, sellers are actively resisting an upward breakout beyond the EMA200 trend line on the 4-hour chart, aiming to curb any explosive growth. At the time of writing, Bitcoin is trading at $26,606, marking a 1.2% increase over the past 24 hours.
Although buyers are exerting pressure, they have yet to overcome a pivotal resistance level at $26,800, suggesting that the buying momentum weakens at these price levels. While the Relative Strength Index (RSI) indicates potential for a positive trend, it also hints at a possible downward adjustment, as the indicator currently resides in the overbought territory.
A confirmed break and close above the 200-day EMA would be an initial indication of renewed strength, potentially paving the way for a consistent recovery toward $28K.
However, a decline below the breakout point of $26K might trigger a wave of selling activity, bringing possibilities of a downturn.