Key Points
- Bitcoin price rebounds above $67k as the supply on exchanges drops to a multi-year low.
- Increased demand from institutional investors and a bullish pennant formation signal a potential super cycle.
After finding support around $65.5k, the price of Bitcoin (BTC) briefly surged past $69k before settling around $67k. The leading cryptocurrency is showing signs of a bullish pattern ahead of the upcoming halving.
This trend, coupled with a rise in demand from institutional investors following the approval of several Bitcoin ETFs, suggests a super cycle could be imminent.
Decreasing Bitcoin Supply on Exchanges
Data from CryptoQuant shows that the Bitcoin supply on centralized exchanges has decreased by over 90,700 in the past month. Interestingly, despite a significant increase in leveraged trading, Bitcoin’s supply on these exchanges is less than two million.
The gap between Bitcoin supply on exchanges has grown exponentially since early last year, indicating a bullish market.
However, Glassnode reports a significant transfer of Bitcoins from long-term holders to short-term traders on crypto exchanges. Short-term traders have increased their holdings by about 1.121 million from long-term investors.
As prices and unrealized profits rise, long-term holders are tempted to sell, according to Glassnode analysts.
The decline in Bitcoin supply aligns with increased demand from institutional investors via recently approved spot BTC ETFs. However, the daily Bitcoin dump from Grayscale’s GBTC, expected to end in July, has dampened bullish sentiment.
Macro Fundamental Factors
Bitcoin’s price has significantly outperformed traditional stock indexes and precious metals in recent quarters, despite lagging in recent weeks. Anticipated interest rate cuts this year have boosted Bitcoin’s bullish sentiment as investors seek refuge from short-term inflation uncertainty.
Additionally, the upcoming US elections, where crypto-oriented votes could determine regime change, are also influencing the market.
Midterm Price Predictions
From a technical perspective, Bitcoin’s price is poised for a new all-time high in the near term. Analysts have noted that Bitcoin is forming an ascending triangle on the weekly timeframe after Thursday’s bullish rebound.
However, Bitcoin’s dominance suggests a short-term reversal after hitting resistance around 54 percent. This could trigger a new rally in the altcoin sector before the bull run begins.
