Bitcoin Traders Aim at $75k Price breakout as Market Supply Hits All-time Low

Insights:

Bitcoin (BTC) price fell as low as $66,380.22 on April 5, down 5% for the month, amid pensive sentiment surrounding ETFs outflows and upcoming macro economic indices reports.

With BTC investors doubling down on long-term bullish bets, what are the chances of a near-term price rebound to $75,000?

Why is Bitcoin Price Down this Week?

BTC price has struggled for momentum in April, as Bitcoin ETFs recorded multi-day negative outflows and US Treasury Yield price surge saw a number of swing trader rapidly exit their Bitcoin holdings over the past week.

In effect, BTC price had dropped 5% within the first 5 trading days in April, shedding over $88 billion market cap during the process.

But despite the Bitcoin price pull-back, critical on-chain metrics show that BTC could be on the verge of a major recovery phase.

BTC Deposits on Exchanges falls to All-time Low, Despite 5% Price Dip

During periods of price correction, investors in panic often shift their coins into their crypto exchanges’ trading wallets, further diluting the market supply, further intensifying the downward pressure.

But interestingly, despite the 5% price decline triggered negative sentiment from Bitcoin ETFs sell-offs and US 10-Year Treasury Yield appreciation, on-chain data trends Bitcoin investors have shows no signs of panic.

 

Interestingly, despite the 5% BTC price dip majority of the traders are increasingly transferring their coins into long-term storage, rather than seek short-term exit opportunities.

Indicatively, CryptoQuant’s Exchange reserves data tracks the total number of coins deposited in their trading wallets across crypto exchanges. Typically an increase in exchange reserves signals imminent sell-offs, while a decrease may indicate looming supply squeeze.

The chart above shows that investors held a total fo 1,973,702 BTC in crypto exchange-hosted wallets at the close of March 31. But that figure as now dropped by  to hit an all-time low of 1,946,758 BTC at the time of publication on April 5.

This implies that Bitcoin investors have shifted over 26,944 BTC into long-term storage, cutting down market supply by over $1.8 billion in the last 5-days.

Such a significant drop-off in exchange reserves could lead to short-term scarcity, and potentially trigger a bullish Bitcoin price reversal in the days ahead.

Bitcoin Price Forecast: BTC faces $2 billion resistance at $70,500

Based on the on-chain insights outlined above, Bitcoin bulls appear to be preparing for a $75,000 price rebound in the coming days.

However, the Liquidation Heatmap charts shows that short traders have mounted leveraged positions worth over $2 billion at the $70,500 territory.

If those traders deploy stop-loss triggers to mitigate major losses BTC price could struggle to reach $71,000 in the near term.

But if the exchange supply decline triggers bullish market reaction as predicted, Bitcoin price could advance towards $75,000 as predicted.