Bitcoin continues to rise as exchange reserves fall to lowest point in years

Bitcoin (BTC) is in a cautious uptrend and market sentiment is slowly turning more positive. However, the market is still very uncertain and at the moment neither the bulls nor the bears the lead.

Bitcoin price rises by 1%

The bitcoin price came back above $41,000 yesterday and held above $41,300 yesterday morning. When bitcoin soared past $41,500 yesterday afternoon, the price jumped again. Bitcoin briefly broke through $42,000 and then peaked around $42,200.

However, bitcoin was harshly rejected there and the price subsequently plummeted. Bitcoin dipped below USD 41,000 and returned to USD 40,500. Yet bitcoin immediately made a small rebound and immediately recovered to $41,500.

Moments later, bitcoin surged past $41,700 but here the resistance was still too great and bitcoin fell back to $41,500 this morning. At the time of writing, bitcoin is making another attempt to move up, reaching $41,900 on KuCoin and $38,400 on Bitvavo.

Whether bitcoin now has enough momentum to break through USD 42,000 remains to be seen. And even if it succeeds, many analysts are still convinced that bitcoin will be rejected near $43,000 and may plummet again. However, even that is far from certain, and if we zoom out slightly, the price still seems to be in a cautious upward trend and higher lows to settle.

Market developments for bitcoin

The more positive market sentiment may also be related to the approval of a new bitcoin futures exchange traded fund (ETF), or publicly traded fund, in the United States. It seems to make investors optimistic about an approval of a bitcoin spot ETF, although many people remain skeptical about that.

In addition, the US dollar index (DXY) price made a big dive yesterday and that is usually good news for bitcoin. This morning, DXY is on the mend and the big question right now is whether DXY will break through $100 again, or be rejected here.

Yesterday there were concerns about the bitcoin of Tesla, the electric car company of Elon Musk, the richest person on earth. Meanwhile, new figures show that Tesla has not sold or bought any BTC since the beginning of last year.

On-chain developments for bitcoin

so-called on chain data show that the whales have accumulated large amounts of bitcoins in the past month, analyst Will Clemente reports. That’s a very bullish sign for the long term.

This means that the number of bitcoins on cryptocurrency exchanges is now at its lowest point in four years, reports analysis company CryptoQuant:

However, this data from analyst Cauê Oliveira shows that bitcoin may be in an accumulation phase and a distribution, or capitulation phase, at the same time. This perhaps shows the great uncertainty of investors in the current market:

Still, analyst Oğuzhan Şengör reports that the capitulation phase may have come to an end citing the following entity-adjusted dormancy flow chart from analytics company Glassnode:

Whalemap keeps it simple: above $42,000 is bullishis under $38,000 bearish†

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