Market intelligence company Santiment has pinpointed three crucial indicators that may signal a bullish trend for Bitcoin BTC/USD.
What Happened: The analytics service emphasizes that the average returns of wallets, the length of time coins remain dormant, and the Bitcoin supply on exchanges all point towards a potential upward movement for the top cryptocurrency by market capitalization.
Santiment has observed that historically, purchasing BTC when the average returns of wallets fall below 0% has been an effective strategy. Currently, wallets that have been active in the last 30 days show average returns around -2.9%.
This data implies that acquiring or increasing positions could statistically be beneficial.
Furthermore, older BTC tokens are being transferred at a “healthy rate,” which often precedes a price surge. Santiment clarifies that a frequent movement of dormant tokens indicates a healthy circulation commonly witnessed during extended bull markets.
Lastly, Santiment highlights that the amount of BTC available on exchanges remains low following substantial withdrawals into cold wallets in late 2024.
At present, only 7.6% of Bitcoin is stored in known exchange wallets, a drop from 9.92% six months prior.
Why It Matters: The encouraging signals for Bitcoin arise amidst ongoing discussions about its position in economic strategies. Michael Saylor, a noted advocate for Bitcoin, recently urged the U.S. government to amass Bitcoin, suggesting it could act as “economic armor” to help reduce the national debt.
This viewpoint is in line with Matthew Sigel’s vision of utilizing Bitcoin as a strategic reserve to mitigate national debt by 2049.
Conversely, not all perspectives are optimistic. Analysts from JPMorgan have raised alarms over decreasing institutional interest in Bitcoin and Ethereum futures, which may indicate broader market vulnerabilities.
This waning demand is linked to futures contracts approaching backwardation, a situation where futures prices dip below spot prices, often observed during market declines.
Price Action: At the time of writing, Bitcoin was trading at $96,204, having declined nearly 2% in the past 24 hours, according to Benzinga Pro data.
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Disclaimer: This content was partially created with the assistance of AI tools and has been reviewed and published by Benzinga editors.
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