Bitcoin’s supply on exchanges has plunged to its lowest point in six years, with over 45,000 BTC—valued at approximately $4.8 billion—withdrawn since early October. This dramatic decrease highlights a growing trend among investors who are moving their assets into cold storage rather than keeping them liquid for trading.
As of Monday morning, Bitcoin is trading at $110,544, reflecting a 3.16% increase over the past 24 hours. After spending four days below the $110,000 mark, the cryptocurrency has seen a rebound that has lifted prices back above this critical level.
Other major cryptocurrencies have also benefited from this momentum. Ether has risen by 3.6% to $4,036, while other notable tokens such as BNB, XRP, and Solana have recorded gains ranging from 2.68% to 3.91% during the same period.
Macroeconomic Factors Fueling Growth
The recent price movements can be attributed in part to improved macroeconomic conditions, particularly as traders anticipate a potential interest rate cut in October. According to the CME Group’s FedWatch Tool, there is a staggering 98.9% probability that the Federal Reserve will reduce rates by 25 basis points in their upcoming meeting. This sentiment was echoed by Federal Reserve Chair Jerome Powell, who noted ongoing softness in the labor market, contributing to eased bond yields and bolstered risk assets.
Interest in spot crypto ETFs has surged in response to these favorable conditions, prompting market participants to view recent sell-offs as prime buying opportunities. Rachael Lucas from BTC Markets pointed out that institutional inflows have played a significant role in the recent recovery, further solidifying the bullish sentiment in the market.
Supply Dynamics Shift
The pattern of Bitcoin withdrawals indicates a strategic shift among investors, who are opting to store their assets rather than keep them on exchanges. With Bitcoin’s circulating supply currently at 19.93 million coins, there are fewer than 1.1 million coins left to be mined before reaching the capped limit of 21 million.
The Market Value to Realized Value (MVRV) ratio over the past 30 days stands at -7.56%, suggesting that recent buyers are facing small unrealized losses. Historically, negative MVRV readings have indicated accumulation phases, often preceding periods of price recovery as selling pressures ease. Moreover, leveraged positions are at multi-year lows, which significantly reduces the risk of forced liquidations in the derivatives market.
Resistance Levels to Watch
Vincent Liu from Kronos Research has identified $107,000 and $110,000 as key support levels for Bitcoin. A decline below $107,000 could trigger liquidations and alter market sentiment. Conversely, resistance is noted between $111,700 and $115,500, with a breakout above $111,000 potentially causing a short squeeze.
The current symmetrical triangle pattern suggests a possible breakout, as Bitcoin’s price tests resistance at $108,500 while maintaining higher lows since October 17. The Relative Strength Index (RSI) has improved from 35 to 59, indicating rising momentum without entering overbought territory.
Should Bitcoin break above $110,850, it could see movement towards $113,500 and $115,960, which are key resistance zones from previous trading channels. Conversely, failure to hold above $107,400 could result in a pullback to $104,550 or $102,000, marking significant support levels.
With Bitcoin’s total market capitalization at $2.16 trillion, sustained buying pressure above $111,000 could further extend the current bullish momentum, paving the way for additional upward movement.
