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Bitcoin Price Analysis: Can BTC Respond to $240M Market Indicator?

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Bitcoin Price Analysis: Can BTC Respond to $240M Market Indicator?

(CTN News) – Bitcoin’s price has remained stable between the $41,500 to $43,000 range, with investors eagerly anticipating the next major catalyst. Could the unexpected decrease in Bitcoin market supply during the weekend potentially shift the momentum in favor of the bulls?

Over the weekend, $240 million worth of BTC was transferred by investors from exchanges.

Bitcoin’s price has been range-bound between $41,500 and $43,000 since recovering from the panic selloff triggered by the US CPI and core inflation data on December 11.

However, on-chain data indicates that a majority of Bitcoin investors are strategically making bullish moves ahead of Christmas.

According to Cryptoquant’s Exchange Reserves data, BTC holders have been transferring their assets from exchanges to long-term storage over the weekend. On Friday, December 15, the total BTC deposited on exchanges was 2,037,828, but as of Sunday, it has decreased to 2,032,017.

This indicates that investors have moved a total of 5,796 BTC from exchange-hosted wallets to long-term storage in the past three days.

With the current price of around $41,000 per coin, this translates to a reduction of $243.4 million in BTC market supply over the weekend alone.

The Exchange Supply metric reflects the total number of a cryptocurrency deposited across exchanges and trading platforms. A decrease in exchange reserves suggests that fewer coins are available for immediate trading in the spot markets.

If the demand for Bitcoin remains steady, this $237 million drop in market supply could potentially lead to a breakout from the consolidation phase as Christmas approaches.

BTC Prediction: Will Bitcoin Price Recover to $45,000 before Christmas?

After reclaiming the $42,000 territory, the market supply for BTC experienced a decline of $240 million over the weekend. This decline could potentially pave the way for BTC’s price to reach $45,000 before Christmas.

Analyzing the weekly time frame, the Bollinger Band technical indicator indicates that BTC’s price is likely to break out of the consolidation phase in the coming days.

Currently, BTC is trading below the middle band or SMA-20, which is at $42,125. This suggests that the current price trend for BTC is still far from being overbought. If the bulls take advantage of the significant drop in market supply over the weekend, there is a possibility of a breakout in Bitcoin’s price.

However, in the short term, the bulls may encounter strong resistance around the upper Bollinger band, which is at $42,420.

On the downside, the bears could undermine the bullish Bitcoin price forecast if they successfully push the price below $40,000. Nevertheless, the support buy wall around the lower Bollinger band, specifically in the $41,800 area, is expected to pose a significant challenge.

SEE ALSO:

UBS CEO Doubts Inflation Control In Interview.

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