Markets
Why did Bitcoin jump 10%? Blockchain company weighs in
E-commerce concept with big shiny bitcoin circuit on business statistical graphs background. 3D rendering
The cryptocurrency the market is rising in recent days, with several large-cap assets posting significant gains over the past week. Most notably, the price of Bitcoin returned from around $61,000 to over $67,000 for the first time in nearly a month.
As expected, this latest price movement has generated a lot of speculation and discussion surrounding the flagship cryptocurrency. Popular blockchain analytics firm CryptoQuant has shared on-chain insights into Bitcoin’s recent price rally and its future trajectory.
How did Bitcoin price reach $67,000?
In a recent report, CryptoQuant revealed the catalyst and on-chain manifestations behind BTC’s latest rally above $67,000. According to the analytics firm, the price of Bitcoin reached new highs due to news of lower-than-expected inflation in the United States.
Inflation data released on Wednesday, May 15, showed that the Consumer Price Index (CPI) rose 0.3% in April – below the 0.4% expected. This revelation suggested that inflation may be falling in the US, making risky assets like Bitcoin more attractive.
View more
🧵 #Bitcointhe price rose from $60,000 to around $66,000, driven by lower-than-expected inflation in the US and reduced selling pressure.
Let’s take a look at the details ⬇️
-CryptoQuant.com (@cryptoquant_com) May 17, 2024
In its report, CryptoQuant revealed that there has been a decrease in selling pressure in the BTC market as short-term holders are selling at low or negative profits. Meanwhile, Bitcoin balances at over-the-counter (OTC) counters have stabilized, implying that fewer coins are entering the open market.
What’s more, the analytics platform highlighted a specific signal on the network that may have predicted Bitcoin’s recent price rally. According to CriptoQuantBTC miners have been extremely underpaid in recent weeks, which is often related to price floors.
The catalysts for BTC’s sustained rally?
CryptoQuant, in its report, identified potential catalysts for continued recovery at the price of Bitcoin. According to the on-chain data firm, demand from permanent holders and major investors is increasing but needs to rise quickly to drive the price of BTC further.
Furthermore, the latest data shows that purchases of Bitcoin ETFs (exchange-traded funds) have decreased to almost zero daily, while the stablecoin’s liquidity growth is also declining. CryptoQuant noted that these two metrics need a jolt, which could be critical for a sustained Bitcoin recovery.
At the time of writing, the price of Bitcoin continues to hover around $67,000, reflecting a 2.5% increase in the last 24 hours. According to data from CoinGecko, the top cryptocurrency rose significantly by 10% last week.
Featured image from iStock, chart from TradingView