The price of {BTC} has seen a significant increase, rising from $60,000 to approximately $66,000, as reported by CryptoQuant. This surge is mainly attributed to lower-than-expected US inflation rates and a decrease in selling pressure in the market.
One of the main reasons behind the price surge of Bitcoin is the behavior of short-term holders, who have been selling their holdings at low or negative profits, reducing overall selling pressure. Additionally, many traders have used up their unrealized profits, contributing to market stability.
The stabilization of Bitcoin balances on over-the-counter (OTC) desks indicates a decrease in the supply of Bitcoin entering the market. This stability is a positive sign for the price, suggesting that fewer Bitcoins are being sold. At the same time, Bitcoin miners are facing low profitability, a factor that historically aligns with price bottoms and may be impacting current price dynamics.
While demand from permanent holders and large investors has stabilized, further acceleration is needed for the rally to be sustainable. The participation of these key market players is essential for maintaining the upward momentum of Bitcoin’s price.
Despite the positive price movement, there are concerns that could affect the sustainability of the rally. ETF Bitcoin purchases remain low, indicating that institutional interest through this channel has not yet picked up. Additionally, the growth of stablecoin liquidity, crucial for providing market liquidity for price increases, is slowing down.
Bitcoin’s recent rally to $66,000 is driven by reduced selling pressure, supply stabilization, and macroeconomic factors such as US inflation rates. While current market conditions are favorable, the future price trajectory of Bitcoin will rely on increased demand from long-term holders and large investors, as well as improvements in ETF purchases and stablecoin liquidity growth.