Bitcoin price climbs to four-day high as long-term holders reduce supply
Bitcoin climbs to $105,500, fueled by bullish signals
Bitcoin price has sparked enthusiasm in the financial markets today, Thursday, January 30th, with a significant 2% gain during the Asian session, pushing the cryptocurrency to a new four-day high above the previous day's peak of $104,800.
Now trading at $105,500 in the European session, Bitcoin is inching closer to last week's daily highs, signaling a potential continuation of the upward trend.
The current price surge is not just a random spike; it's supported by key indicators and on-chain market data. The Relative Strength Index (RSI) for Bitcoin remains in bullish territory, suggesting there might be more room for growth before reaching overbought conditions.
BTC price dynamics (January 2025). Source: Tradingview
Secondly, a closer look at historical trends reveals an intriguing pattern in the crypto market, distinct from traditional stock markets. Markus Thielen, founder of 10x Research, noted in a recent report shared with CoinDesk that sharp declines in the supply held by long-term Bitcoin investors often precede strong rallies. This phenomenon was observed in the first and fourth quarters of 2024, where a decrease in long-term holder supply coincided with Bitcoin price increases. This suggests that the current offloading by long-term holders could be setting the stage for a short squeeze, pushing Bitcoin prices even higher.
Bitcoin price eyes all-time high amid potential market squeeze
The level of $102,700 is now seen as a critical support floor for Bitcoin, providing a base from which the price could test recent all-time highs of $108,200 and $109,390. Hence, Bitcoin could be on a path to new record highs, driven by the bullish sentiment and the mechanics of supply and demand within its market.
In essence, while the stock market might interpret large sell-offs as signs of an impending downturn, the crypto market, particularly Bitcoin, sees this as an opportunity for bullish momentum. As long-term holders reduce their balances, the market dynamics shift towards a potential price surge, which is what we might be witnessing now.
On-chain miner data indicated reduced selling pressure as Bitcoin failed to sustain gains above $103,800. The 50-day EMA acted as resistance, causing the price to drop back to $100,000.
