It is a truth universally acknowledged that a cryptocurrency in possession of a good fortune must be in want of a rally. Bitcoin, that most capricious of assets, has flirted with the $98,000 mark since the early days of November 2024, only to reclaim it with the grace of a debutante at her first ball. Such reclaims, as any observer of the market will attest, often herald new all-time highs. 🎭
At present, Bitcoin (BTC) stands resolutely above $98,000, with a chorus of technical and onchain metrics singing in harmony of further upside. One might say it is the Mr. Darcy of the crypto world—brooding, unpredictable, yet undeniably attractive. 💼
Less and Less Bitcoin on Exchanges
One cannot help but notice the dwindling supply of Bitcoin on exchanges, a phenomenon as intriguing as a mystery novel. Over the past six months, BTC balances on exchanges have diminished by 13%, from 3.1 million BTC on August 9, 2024, to a six-year low of 2.67 million BTC on February 5. This decline, coinciding with a 62% rise in BTC’s price, suggests that investors are hoarding their digital gold like a miser with his guineas. 🏴☠️
When BTC investors transfer their funds from centralized exchange (CEX) wallets to self-custody wallets, it is as though they are locking their valuables in a safe, with no intention of parting with them. On February 5 alone, more than 17,000 BTC were withdrawn, with 15,000 BTC exiting the US-based exchange, Coinbase. Such a withdrawal, the largest since April 2024, prompted André Dragosch, the European head of research at Bitwise, to remark:
“Whales are buying this dip.”
Market intelligence firm Santiment echoed this sentiment, noting that whales are accumulating following Bitcoin’s latest price drawdown. As they put it:
“This is an ideal setup for crypto market caps to rise, even if it takes a few more weeks (or even months) to see the generally bullish impact of coins being absorbed by whales.”
Weakening US Dollar
The US Dollar Index (DXY), that barometer of the greenback’s strength, has faltered by 1.7% from its February 3 high of 109.51 to 107.673. This decline, spurred by President Donald Trump’s tariff threats against Canada and Mexico, has provided a boon to risk assets, including Bitcoin. The subsequent pause on tariffs brought some relief, with the DXY recovering from a low of 106.91 on February 5. 🌍
Crypto influencer Lark Davis, ever the optimist, declared:
“If $DXY continues to fall and with all bullish catalysts like the US SBR & nation-state Bitcoin FOMO, this could mark the next leg of the crypto bull market.”
Spot Bitcoin ETF Inflows Stay Strong
Bitcoin’s price has also been buoyed by US-based spot Bitcoin ETFs, which have seen inflows of approximately $2.5 billion over the last two weeks. Since their market debut in the United States on January 11, 2024, these investment products have attracted a staggering $40 billion in capital. Such institutional demand, long considered a cornerstone of Bitcoin’s appeal, is as encouraging as a favorable marriage proposal. 💍
This trend is reflected across all Bitcoin products, with the latest Digital Asset Fund Flows Weekly Report by CoinShares noting that flows into BTC investment funds totaled $486 million in net flows during the week ending January 31. 📈
Bitcoin’s Bull Flag Points to More Upside
Despite the recent BTC price drop, a bull flag has emerged on the weekly chart, hinting at the continuation of the uptrend. Bitcoin bulls, ever the hopeful suitors, are focused on flipping the flag’s upper boundary at $101,800 into support. A weekly candlestick close above this level would signal a bullish breakout, projecting a rally to $167,000—a 70% ascent from the current price. Such a move would be as dramatic as a proposal at a ball. 💃
The relative strength index’s position at 63 further suggests that the market conditions still favor the upside. In the words of every matchmaking aunt in history, “It is all very promising indeed.”
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2025-02-06 16:25