Is This Bitcoin Rally A Trap? On-chain Analysis
October has brought renewed hope to the cryptocurrency market as BTC price made a strong start, surging to $28,600 on Tuesday before experiencing a minor recoil. This surge follows weeks of rising optimism, with many hoping that the new month will bring better prospects for the crypto market after a period of lackluster volatility in the third quarter.
BTC Exchange Outflows Persist As Hodlers Hold Their Nerves
One of the key factors contributing to this enthusiasm is the improved fundamentals and technicals of Bitcoin. On Tuesday, crypto analytics firm Santiment highlighted the significance of several large transactions just before Bitcoin broke above the $28,000 mark for the first time in six weeks.
As per the firm, these transactions ranged in value from $187 million to $346 million. Additionally, the firm highlighted that the supply of Bitcoin on exchanges has decreased from 5.99% to 5.73% since September 1st, a trend seen as a positive sign for the market.
Recently, the firm also reported that Bitcoin whales have been accumulating Bitcoin and Tether (USDT) over the past six weeks. As of September 29, these whales collectively held 13.03 million BTC, the highest amount in 2023. Tether sharks and whales have also been accumulating buying power, with wallets holding 100,000 to 10 million USDT, totaling 15.03 billion coins, a six-week high.
Crypto Analysts Predictions for BTC Price
Crypto analysts are also sharing their positive outlook for Bitcoin. Adrian Zduńczyk, founder of crypto analysis website “TheBirbNest,” has predicted an expected BTC price target of $40,500. His prediction is based on a resilient bull market, rising dominant trends, and a six-month consolidation period that implies the potential for an explosive breakout. Crypto veteran Peter Brandt shared his bullish outlook for Bitcoin as he confirms reverse head and shoulder formation.
Rekt Capital, another crypto analyst, has noted that Bitcoin faced resistance around $27,100 in September but has since broken out in October. According to him, the reclamation of this resistance level as support could lead to further price increases.
However, amidst the optimism, cautionary voices are also being heard. Some analysts, like “Stockmoneylizards,” pointed to the similarities between the current Bitcoin chart and that of 2020, suggesting that a breakout from the current triangle pattern could be significant.
At press time, Bitcoin price was in the red, showing a 2.67% decrease in the last 24 hours, with a price of $27,263.
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