Bitcoin has made a recovery back towards the $61,000 level during the past day. Here are the factors that could be behind this surge.
Bitcoin Has Made Some Recovery During The Last 24 Hours
After showing lackluster price action under $60,000 during the past few days, Bitcoin has finally shown some momentum in the last 24 hours, with its price surging by more than 4%.
The chart below shows how the cryptocurrency’s recent trajectory has looked like.
Looks like the price of the coin has jumped over the last 24 hours | Source:
At the peak of this rally, BTC had broken above $61,400, but the asset has since seen a pullback. Nonetheless, even after the drawdown, BTC is still trading around $60,800, which is a notable improvement over yesterday.
As for what could be behind this surge, perhaps on-chain data can provide some hints.
BTC Has Seen Multiple Positive On-Chain Developments Recently
There are a couple of developments that have occurred in the cryptocurrency space recently that could be positive for Bitcoin. First, according to data from the on-chain analytics firm , BTC investors carrying between 100 and 1,000 BTC have made a considerable buying push during the last six weeks.
The data for the amount of supply held by the BTC holders carrying 100 to 1,000 tokens | Source:
At the time Santiment had shared the chart (which was yesterday), the Bitcoin investors with 100 to 1,000 BTC had held a combined 3.97 million tokens. Out of this, 94,700 coins were bought by them within the past six weeks.
The cohort with wallets in this range is popularly known as the “sharks.” Along with the whales, the sharks are considered the key investors in the market, due to the considerable scale of coins that they hold.
Thus, the fact that these large investors were accumulating while BTC had been struggling earlier shows that big money was confident that the cryptocurrency would turn itself around.
The other positive development has been the uptrend that the supply of Tether (USDT) has been showing recently, as analyst Ali Martinez has pointed out in an X .
The value of the metric appears to have been heading up in recent days | Source:
Investors generally use stablecoins like Tether whenever they want to escape the volatility associated with assets like Bitcoin. Such investors who store their capital like this, however, eventually plan to venture back into the volatile coins, so the supply of the stablecoins may act as a store of dry powder available for deploying into BTC and others.
Naturally, when investors do swap their stables for these assets, their prices observe a bullish boost. With Tether’s supply having seen a sharp jump recently, the investors’ potential purchasing power could be considered to have gone up.
This could have happened through two processes: a rotation of capital from Bitcoin and other cryptocurrencies, and fresh capital inflows. The former would imply investors have sold their volatile coins for now, but as mentioned before, these investors may buy back into the market in the future.
The latter would be entirely bullish, as it would mean there is fresh interest entering into the space. In reality, both of these likely occurred to some degree and as Bitcoin has managed to find a rebound, it’s possible new capital inflows have made up for more of the increase.
Featured image from Dall-E, Glassnode.com, Santiment.net, chart from TradingView.com
Keshav is currently a senior writer at NewsBTC and has been attached to the website since June 14, 2021.
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Keshav has been writing for many years, first as a hobbyist and later as a freelancer. He has experience working in a variety of niches, even fiction at one point, but the cryptocurrency industry has been the longest he has been attached to.
In terms of official educational qualifications, Keshav holds a bachelor’s degree in Physics from one of the premier institutes of India, the University of Delhi (DU). He started the degree with an aim of eventually making a career in Physics, but the onset of COVID led to a shift in plans. The virus meant that the college classes had to be delivered in the online-mode and with it came free time for him to explore other passions.
Initially only seeking to make some beer money, Keshav unexpectedly landed clients offering real projects, after which there was no looking back. Writing was something he had always enjoyed and to be able to do it for a living was like a dream come true.
Keshav completed his Physics degree in 2022 and has been focusing on his writing career since, but that doesn’t mean his passion for Physics has ended. He eventually plans to re-enter university to obtain a masters degree in the same field, but perhaps only to satiate his own interest rather than for using it as a means to find employment..
Keshav has found blockchain and its concepts fascinating ever since he started going down the rabbit-hole back in 2020. On-chain analysis in particular has been something he likes to research more about, which is why his NewsBTC pieces tend to involve it in some form.
Being of the science background, Keshav likes if concepts are clear and consistent, so he generally explains the indicators he talks about in a bit of detail so that the readers can perhaps come out having understood and learnt something new.
As for hobbies, Keshav is super into football, anime, and videogames. He enjoys football not only as a watcher, but also as a player. For games, Keshav generally tends towards enjoying singleplayer adventures, with EA FC (formerly FIFA) being the only online game he is active in. Though, perhaps due to being ultra-focused on the game, he is today a semi-pro on the EA FC scene, regularly participating in tournaments and sometimes even taking back prize money.
Because of his enthusiasm for anime and games, he also self-learned Japanese along the way to consume some of the untranslated gems out there. The skill didn’t merely remain as just a hobby, either, as he put it to productive use during his exploration for small-time gigs at the start of COVID, fulfilling a couple of Japanese-to-English translation jobs.
Keshav is also big into fitness, with agility and acceleration-related workouts making a big part of his program due to the relevance they have in football. On top of that, he also has a more traditional strength based program for the gym, which he does to maintain an overall fitness level of his body.
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