BTC price peaked at $52,858 on February 15, registering a monthly increase of 24.3%. An unusual trend in Bitcoin exchange flows suggests more dramatic action could follow.
Bitcoin price has reached a new 2024 high in the last four days, dating back to February 12th.
Investors have moved $1.6 billion worth of Bitcoin into long-term storage
Thanks to increased buying pressure from investors pouring funds into the newly launched spot ETFs, Bitcoin increased its market capitalization by over $200 billion in the first half of February.
But beyond the eye-catching headlines and record-breaking inflows, key on-chain data trends suggest the rally is far from over.
CryptoQuant's Exchange Reserves metric tracks real-time changes in the number of BTC coins currently deposited on crypto exchanges and trading platforms.
As shown in the chart, Bitcoin foreign exchange reserves stood at 2.1 million BTC on January 25th. However, this number has now dropped by 31,255 BTC, reaching just over 2 million BTC at the time of writing on February 15th.
At the current price of $52,000, that means $1.6 billion worth of BTC has disappeared from exchanges as investors increasingly opt for long-term storage.
Bitcoin (BTC) price, exchange reserves vs. price | Source: CryptoQuant
Essentially, such a massive decline in foreign exchange reserves means that there is now much less BTC available to trade on exchanges. Even if this is temporary, it often has a positive impact on short-term price developments for several reasons.
First, it signals that most investors are looking for future profits rather than padding their wallets in hopes of exploring short-term selling opportunities at current peak prices.
More importantly, the relative scarcity created by dwindling market supply leads to accelerated price increases with each new wave of demand. With Bitcoin ETF sponsors on a buying spree, this bullish catalyst is likely to push BTC price towards the $60,000 level in the coming days.
Prediction: Can Bitcoin Price Reach $60,000?
In summary, the market shortage caused by the $1.6 billion drop in foreign exchange reserves puts BTC price in a prime position for a further rise towards $60,000. However, in the short term, bullish traders face a major hurdle in the $55,500 area.
IntoTheBlock's In/Out-of-the-Money (GIOM) data groups existing BTC holders by their historical buy-in prices. It shows that 462,640 addresses purchased 228,000 BTC at the floor price of $55,595.
This group of holders could pose a hindrance if they book some profits as Bitcoin approaches its break-even price.
However, if bulls can manage a decisive breakout above the $55,500 resistance, a retest of $60,000 could be on the horizon, as predicted.
Bitcoin (BTC) Price Prediction, February 15 | Source: IntoTheBlock
On the other hand, the bears could invalidate this optimistic forecast if the price of Bitcoin falls below $45,000. However, as seen above, the 898,470 addresses that purchased 509,330 BTC at an average price of $46,400 could be building a support buy wall.
If there is a bearish reversal, frantic covering buying by these investors could inadvertently trigger a recovery.
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