At present, the inflow of BTC on exchanges is 20,000 BTC, the lowest in nearly 10 years. Analysts pointed out that long-term holders (LTH) have stopped selling tokens and have begun to accumulate, which has historically been a bullish signal.
On May 7th, the cryptocurrency market was in a consolidation phase, with Bitcoin continuing to stay above $63,000, while most altcoins experienced slight declines. Data shows that on Tuesday, the Bitcoin trading price ranged from $62,815 to $64,445, with both bulls and bears evenly matched. At the time of writing, the BTC trading price is $63,010, down 0.5% in the past 24 hours.
Among the altcoins, most tokens in the top 200 by market capitalization are trending downwards. AIOZ Network (AIOZ) and Jito (JTO) saw gains, rising by 13.9% and 12.9% respectively, while Ethena (ENA) rose by 7.2%. Helium had the largest decline, down 5.6%, followed by Book of Meme (BOME) down 5.6%, and Celestia (TIA) down 5.5%.
The total market capitalization of the cryptocurrency market is currently $2.33 trillion, with Bitcoin dominance at 53.4%.
The inflow of Bitcoin on exchanges drops to the lowest in nearly 10 years
Another set of data that investors are paying attention to is the inflow of Bitcoin on cryptocurrency exchanges. This data recently hit its lowest point in nearly a decade. With the entry of institutional investors into Bitcoin investments, there has been a significant shift in sentiment among holders this year, which may indicate an upcoming bullish recovery.
According to data from CryptoQuant, investors wanting to sell BTC have been decreasing since February 2018. The exchange inflow of BTC, measured by MA-365D, has dropped from 90,000 to 36,000. Currently, the inflow of BTC on exchanges is 20,000 BTC, the lowest since 2015 when the Bitcoin trading price was below $1,000 per coin.
At the same time, CryptoQuant analyst Axel Adler pointed out that long-term holders (LTH) have also stopped selling tokens and have started accumulating again, which has historically been a bullish signal.
Expected volatility
Secure Digital Markets analysts pointed out, “Bitcoin has been fluctuating between $62,700 and $64,700 since Saturday. The continuous decline in the U.S. dollar index and 10-year Treasury yield supports the valuation of risk assets. Breaking through the $65,000 mark undoubtedly indicates a bullish trend.”
Although Bitcoin is currently in a consolidation phase, analysts have noted that the recent rebound “has sparked enthusiasm among cryptocurrency options traders, with significantly more trading volume in bullish options than bearish options, indicating a bullish sentiment in the market.”
Data shows an increased demand for out-of-the-money bullish options with strike prices between $70,000 and $100,000. According to Deribit, traders have obtained over $688 million worth of bullish options with a strike price of $100,000, marking the highest nominal open interest on the platform.
Market analyst Bloodgood stated that in the spot market, “buyers have heavily entered below $60,000, clearing out late short positions, and currently maintaining support levels between $58,000 and $59,000. However, bullish momentum needs to continue, otherwise it will eventually fall back to this level.”
Bloodgood analyst said, “We are now interested in the daily level slightly below $65,000, which will tell us whether this rebound will continue to rise or fall below $60,000. On the daily chart, we can see a clear downward trend continuing, with a new low below $57,000.”
From a technical indicator perspective, bulls hope to see higher highs formed, which means Bitcoin needs to rise above $67,000. On the other hand, bears hope to see this daily resistance level unchanged and bring Bitcoin back below $60,000. Both bulls and bears will continue to compete within this range this week.
When talking about broader market forces that impact asset prices, Bloodgood mentioned that “macro factors have been swinging between a soft landing and dovish Federal Reserve policies, as well as concerns about resurgent inflation.”
The driving force that bulls need is the non-farm payroll report (NFP) released on Friday. The NFP revealed that the U.S. economy added 175,000 jobs in April 2024, a slowdown from the upwardly revised 315,000 jobs in March and far below the market’s expected growth of 243,000 jobs.
Bloodgood concluded, “In normal circumstances, a weak job market is not seen as good news by most people, but in this case, it is good news for stocks and cryptocurrencies as it prompts the Federal Reserve to take a more dovish stance.”
Data provided by Alternative shows that the overall sentiment in the cryptocurrency market is still in the “greed” territory, and some analysts suggest that further softening is needed to ensure the removal of excess bubbles from the market.