Bitcoin (BTC) Price Analysis: Dying-Minute $50k Breakout or Another Pullback? 

Key Insights:

• Bitcoin’s (BTC) price grazed the $44,000 mark in the early hours of Thursday, Dec 21, and the bulls swung back into action. 
• But despite the positive price action, Bitcoin investors transferred 4,610 BTC (~$202 million) into exchange wallets this week. 
• Relative Strength Index shows that the BTC market is approaching overheated territory, and could impact the ongoing price upswing. 

Bitcoin (BTC) price prodded above the $44,000 mark on Thursday morning as the bulls swung back into action. On-chain data trends reveal Bitcoin investors are holding an unusually high amount of BTC in their trading wallets. 

Can BTC price stage a dying-minute rally above $50,000 before the end of 2023? 

Bitcoin Holders Have Shifted $200 million BTC into Trading Wallets this Week? 

Bitcoin came within $700 of scoring a new 2023 peak as BTC prices traded as high as $44,050 on Thursday Dec 21. But despite Bitcoin trading at a weekly peak, a worrying on-chain signal suggests that BTC is likely to face another pullback in the short term. 

According to the CryptoQuant chart below, investors held a total of 2,033,186 BTC  in exchange-hosted wallets at the start of the week on Dec 16. But at press time on Thursday Dec 21, the figure has increased noticeably to hit o 2,037,796. 

In essence, BTC Exchange Reserve deposits has now increased by 4,016 BTC this week, raising concerns of an imminent profit taking session.  

Exchange Reserves tracks the real-time changes in portion onf cryptocurrencies supply that is currently deposited across exchanges and trading platforms.

Typically, an increase in Exchange Reserves suggests that many investors are seeking out profit-taking opportunities in the short-term.

Unsurprisingly, Bitcoin price has historically trended downward when Exchange reserves rise and vice versa, as observed in the chart above. 

With Bitcoin price currently trading at $44,000, the 4,610 BTC exchange inflows highlighted above, means that investors have added $202 million worth of Bitcoin to the spot markets supply this week alone.  

Unless it is matched by a comparable degree of fresh demand, this $202 million dilution of market supply could momentarily slow down Bitcoin price rally in the short term. 

BTC Price Forecast: Can it Reach $50,000 in 2023?

The general social sentiment surrounding BTC remains firmly bullish. However, drawing historical and intuitive inferences from the current on-chain data trends, Bitcoin is more likely to consolidate below $45,000 than reclaim $50,000 in the days ahead.

The Relative Strength Index (RSI 14) trending at 62.83 also confirms that BTC market is now entering overbought territory. Hence. strategic new entrants could wait for a less overheated entry point.

The bulls could regroup at the 7-day Simple Moving Average price of $42,572 for consolidation. But failure to hold that support level could open the doors to a possible pullback below $41,000.

On the upside, the bulls could take charge of the Bitcoin markets again if BTC price flips $45,000. But as observed in the chart above, the bears could mount a significant resistance at current 2023 peak price of $44,700.

But given the rising Bitcoin exchange supply, this bullish scenario looks unlikely in the short-term.