Bitcoin (BTC) Price Finally Breaks Above $45,000 —More Gains Ahead?

Key Insights: 

• Bitcoin’s (BTC) price soared as high as $45,860 on Tuesday morning, with several on-chain signals flashing for more upside. 
• In the last 7 days, investors have shifted 30,000 BTC (~$1.4 billion) away from exchanges and trading platforms signaling a dominant HODLing trend.  
• Having cracked the $45,860 for the first time since April 2022, the bulls could now set their sights higher during the next rally. 

Bitcoin’s (BTC) price broke above the $45,000 territory on Jan 2, 2024, soaring to a 20-month peak of $45,860 within the daily timeframe. A crucial on-chain metric reveals bullish Bitcoin holders are moving a significant amount of BTC from exchange-hosted wallets into long-term storage over the past week. 

Will this rapid decline in BTC exchange supply trigger a much larger upswing in the days ahead? 

Investors Move BTC Worth $1.4 Billion from Trading Platforms into Long-term Storage

On Tuesday Jan 2 2024, Bitcoin price hit a daily timeframe peak of $45,860, its highest since April 2022. Looking beyond the green candlesticks on the price charts, on-chain data trends suggest the rally had been preceded by a rapid decline in BTC market supply over the past week. And in fact, this could set BTC up for further upswing in the days ahead. 

Specifically, Santiment’s Supply on Exchanges metric illustrates that since christmas, BTC holders have been rapidly shifting unusually large amounts their holdings from exchanges and trading platforms, instead, opting for long-term storage. 

As seen below, the total Bitcoin holdings deposited on Exchanges stood at 1.09 million BTC as of Dec 25. But at press time on Jan 2, it has reduced to just 1.06 million BTC. 

This shows that investors shifted a total of 30,000 BTC from exchange-hosted wallets, into long-term storage within the last 7 days. When valued at the current price around $45,500 per coin, this means BTC market supply has reduced by $1.4 billion within the past week.

Simply put, the Supply on Exchanges on-chain metric provides a real-time snapshot of the total units of a cryptocurrency currently deposited across various exchanges and trading platforms. 

A decline in exchange reserves means that fewer coins are now readily available to be traded on the spot markets. In effect, an upswing in market demand could cause a market imbalance and  trigger an accelerated price rally. 

Unsurprisingly, the $1.4 billion drop in BTC market supply between Dec 25 and Jan 2 has been  heralded by a rapid 7% price upswing. 

BTC Price Forecast: Can Bitcoin Reach $50,000 Ahead of ETF Approval? 

Currently, it appears that many Bitcoin investors are looking to hold on to their assets until the spot BTC ETF approval verdict. If demand for Bitcoin remains steady, this market imbalance could trigger a BTC price breakout toward $50,000. 

Firstly, having reclaimed the $45,000 territory, the bulls will likely set their sights higher, during the next rally. Psychologically, this puts the $50,000 target in focus. 

Secondly, the Bollinger Band technical indicator shows that, with BTC price currently trading above $45,000, it  has broken well-above the 20-day Simple Moving Average (SMA). 

This alignment suggests that most trader are currently willing to pay more for BTC than they would have offered 20 days ago. 

 

However, in the short-term, the bulls could face significant resistance around the $47,330 area. A decisive breakout above that sell-wall could open the doors to a $50,000 retest. 

On the downside, the bears could negate that bullish Bitcoin price forecast if they successfully force a downswing below $41,150 However, the support buy-wall around the lower Bollinger band at $41,160 area will likely provide sufficient cover in the short-term.