Bitcoin (BTC) price grazed the $64,000 territory in the early trading hours of Feb 28, after yet another wave of demand from Spot ETFs. However, critical on-chain signals suggest the market rally is not over yet for the pioneer crypto currency.
Amid heightened market euphoria in February, Bitcoin prices climbed to historic peaks, delivering a blistering 51% growth performance. But despite sitting on sizable profits, on-chain data trends show that BTC investors are looking to hold out for more gains in March 2024.
Bitcoin Exchange Reserves Dipped 50,000 BTC in February 2024
Bitcoin price has been on a steady upward trajectory since the ETF began to rake in record inflows in early February. With the ETFs demand showing no signs of slowing down, other investors within the ecosystem have taken a cue to adjust their investment outlook for a longer-term horizon.
Cryptoquant’s BTC exchange reserves data captures real-time BTC balances deposited in wallets hosted on crypto trading platforms. It shows that as profits soared to 51% in February BTC holders kept shifting coins into long-term savings.
Bitcoin investors held a total of 2,083,818 BTC million in their trading wallets as of Feb 1. But at the end of the month, that figure had rapidly dwindled to 2,038,022, the lowest since CryptoQuants records began in 2021.
Bitcoin (BTC) Miners Reserves | Source: Cryptoquant
Effectively, this implies that investors have shifted over 45,796 BTC worth approximately $2.8 billion from their trading platforms into cold storage and other longer-term savings options.
Investors interpret its a vital bullish signal, when market supply of a cryptocurrencies declines persistently over an extended period as observed in the Bitcoin markets throughout February 2024.
Firstly, this $2.8 billion decline in exchange reserves causes a relative market scarcity that puts additional upward pressure on prices if demand remains steady.
But more importantly, when it occurs during a market uptrend, where investors are sitting on over 51% gains for the month, it signals an overwhelming conviction among existing holders that the Bitcoin price rally will continue towards the $70,000 territory in March 2024.
Also, when valued at the current BTC price of $41,000, the coins offloaded over the past week are worth approximately $4.1 billion. If market demand remains weak, the intense sell pressure could promptly send BTC price spiraling below $40,000.
BTC Price Forecast: Breaking $65,000 Is the Next Challenge
From an on-chain perspective, the $2,8 billion decline in BTC market supply in February, put BTC price in vantage position for a major breakout to new all-time highs above $70,000.
However, IntoTheBlock’s In/Out of the Money Around Price data emphasizes the BTC faces significant resistance at the $65,000 area.
Bitcoin (BTC) Price Forecast | Source: IntoTheBlock
The chart above depicts that 110,980 existing addresses had funded their accounts with 19,800 BTC at the maximum price of $64,466. If the bulls can smash through that sell-wall the Bitcoin price will likely enter an accelerated rally above $70,000 as predicted.
On the downside, Bitcoin bears could regain control of the market again if the Bitcoin price tumbles below the key support level at $58.,000.
This article was originally posted on FX Empire
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