bitcoin surpassed $78,000, lifting the overall crypto market. The move came as risk sentiment improved after US President Donald Trump extended the ceasefire with Iran. Stock index futures also gained.
The cryptocurrency’s rise ended weeks of choppy trading between $65,000 and $75,000 that defined March and early April, finally giving momentum traders the green signal they had been waiting for.
Momentum traders buy when they see evidence that an uptrend is underway. Bitcoin’s breakout is exactly that, and more buyers could accumulate as a result, adding to the momentum. As the first law of motion says: an object in motion stays in motion until an external force acts on it, although Sir Isaac Newton may not have been thinking about the financial markets at that time.
“The market spent months limited in the 65 to 75 range. Breaking out of that type of range is important because it changes behavior. Sellers who were comfortable fading rallies above 74 now have to reevaluate. Momentum buyers who were waiting for confirmation finally have something to fall back on,” Marex analysts said.
Onchain indicators suggest the same. For example, the number of coins held in wallets linked to centralized exchanges has fallen to a new multi-year low of 2.67 million BTC, according to data source CryptoQuant. It points to a continued accumulation of investors, which could culminate in a supply shock.
“Bitcoin supply on exchanges continues to shrink, with fewer coins available to sell, more BTC moving to long-term holders, and liquidity tight. Bitcoin is becoming increasingly scarce: a decrease in supply means an increase in volatility,” Delta Exchange said on X.
Still, QCP Capital urges caution, pointing to the persistent relative wealth of bitcoin puts on Deribit. Put options are used as a hedge against possible price drops in the underlying asset. He added that crypto trends currently appear tied to the oil price and interest rate outlook.
“The path forward remains anchored to oil and politics. A move lower in crude or a clearer signal from the Fed would support risk. Without that, markets are likely to remain in a holding pattern, pricing in uncertainty rather than resolution,” the Singapore-based firm said in a market update.
In traditional markets, WTI crude oil futures are trading around $90, having rebounded from a low of $78 on Friday.
In the broader market, DeFi security risks remain an issue as attacks proliferate. Earlier today, Sui-based Volo protocol lost over $3 million just days after the KelpDAO event that caused collateral damage across the sector. Stay alert!
Read more: For an analysis of current activity in altcoins and derivatives, see Crypto Markets Today. For a complete list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
What is trend?
This is an excerpt from CoinDesk’s newsletter ‘Daybook’. Register here, if you haven’t already.
Today’s sign
The chart shows the daily price movements of bitcoin in candlestick format, with lines indicating the 100-day and 200-day average prices.
BTC price has established itself firmly above the 100-day average, represented by the white line. This is critical because the 100-day average capped the bounce in January, after which sellers reestablished control, leading to a deeper decline to nearly $60,000.
Now that the price has broken out, which usually indicates strengthening bullish momentum, attention shifts to the 200-day average, currently positioned at $85,900.
