Bitcoin Price Analysis: Will BTC React to this $240 Million Market Signal? 

Insights:

• Bitcoin (BTC) price has remained sandwiched within the $41,500 to $43,000 range since recovering from the panic selloff that heralded the US CPI and core inflation data on Dec 11.
• On-chain data trail reveals that investors have shifted 5,000 BTC away from exchanges and trading wallets over the weekend 
• Technical indicators highlight the key resistance that BTC needs to reclaim for the bulls to regain control in the week ahead.  

Bitcoin’s (BTC) price has consolidated within the $41,500 to $43,000 range as investors await the next significant catalyst. Can the unusual decline in Bitcoin market supply over the weekend tilt the momentum in favor of the bulls?

Investors Shifted $240M Worth of BTC Away From Exchanges Over the Weekend

Bitcoin’s (BTC) price has remained sandwiched within the $41,500 to $43,000 narrow range since recovering from the panic selloff that heralded the US CPI and core inflation data on Dec 11.

However, on-chain data trail reveals that majority of Bitcoin investor are making strategic bullish moves ahead of Christmas. 

Specifically, Cryptoquant’s Exchange Reserves data illustrates that BTC holders shifted their assets exchanges and trading platforms this weekend, opting for long-term storage. 

As seen below, the total BTC deposited on Exchanges stood at 2,037,828 as of Friday Dec 15. But at press time on Sunday, it has reduced to just 2,032,017.

This shows that investors shifted a total of 5,796 BTC from exchange-hosted wallets, into long-term storage within the last 3 days. When valued at the current price around $41,000 per coin, this means BTC market supply has reduced by $243.4 million this weekend alone.  

In concise terms, the Exchange Supply is an on-chain metric that depicts the total number of a cryptocurrency currently deposited across various exchanges and trading platforms. Ideally, a decline in exchange reserves means that fewer coins are now readily available to be traded in the spot markets. 

If demand for Bitcoin remains steady this $237 million drop in market supply could be a precursor for BTC price to breakout of the consolidation phase as Christmas draws near. 

BTC Forecast: Can Bitcoin Price Reclaim $45,000 by Christmas? 

Having reclaimed the $42,000 territory, the $240 million decline in market supply recorded this weekend, could set BTC price up for another leg-up toward $45,000 ahead of Christmas. 

In the weekly time frame, Bollinger Band technical indicator also suggest that BTC price will likely breakout of the consolidation phase in the days ahead. 

As seen below, BTC is currently trading below the middle band or SMA-20 of $42,125.

This alignment suggests that BTC’s current price trend is still far from overbought territory. If the bulls capitalize on the sharp drop in market supply this weekend,, Bitcoin price could breakout. 

 

However, in the short-term, the bulls could face significant resistance around the upper Bollinger band of $42,420.

On the downside, the bears could negate that bullish Bitcoin price forecast if they successfully force a downswing below $40,000. However, the support buy wall around the lower Bollinger band at $41,800 area will likely prove daunting.