Bitcoin (BTC) Price Surges Past $103,000 as Spot Market Reserves Continue to Drain

Bitcoin price is rapidly approaching its all-time high again as it trades past $103,000. It has seen a weekly price increase of 10.4% and a monthly gain of over 24%. The cryptocurrency is enjoying a wave of optimism in both crypto and traditional markets.

The digital asset briefly touched $105,000 on Friday before pulling back slightly to $103,000. This places it about 4% below its January all-time high, with recent data showing large amounts of Bitcoin leaving exchanges, particularly Binance.

On Friday alone, over 3,000 BTC (worth approximately $312 million) was withdrawn from Binance, marking one of the largest daily outflows in recent months.

This major withdrawal happened on the same day as a new trade agreement was reached between the United States and China, which also boosted US equity markets. The S&P 500 jumped more than 3% following this geopolitical development.

The outflow is part of a larger trend, with Binance’s Bitcoin reserves steadily declining from around 595,000 BTC in late February to 541,400 BTC by mid-May.

Exchange Outflows Signal Accumulation

When investors move Bitcoin off exchanges into private wallets or cold storage, it typically indicates a preference for holding rather than selling. This behavior suggests accumulation strategies are in play.

Historically, declining exchange balances point to lower selling pressure in the near term and can support a more bullish outlook for the medium term.

The timing of these withdrawals, coinciding with improved relations between two economic superpowers, adds interesting context to investor behavior. It appears Bitcoin holders are adjusting their strategies in response to this positive macro development.

With reduced global economic uncertainty, large Bitcoin holders, also known as ‘whales,’ seem to be positioning themselves for potential future gains.

Market analysts note that these movements reflect how capital is shifting across different asset classes in response to broader economic developments, showing increased risk appetite among investors.

Market Sentiment Remains Strong But Not Extreme

Despite Bitcoin approaching its all-time high again, the market sentiment has yet to reach extreme levels of optimism. The Bitcoin Fear & Greed Index currently stands at 70, indicating strong greed but still below the extreme greed threshold of 75.

Earlier in the month, market sentiment had cooled to neutral levels when the price rally paused. However, as prices resumed their upward march, investor mood improved once again.

The absence of extreme greed despite Bitcoin’s near-record price could actually be a positive signal for continued price growth. Historically, Bitcoin has often moved contrary to crowd sentiment, with major tops forming when extreme optimism prevails.

The fact that the Fear & Greed Index remains outside the extreme greed zone suggests that excessive hype hasn’t yet developed among investors. This could mean Bitcoin has more room to grow before reaching a market top.

Market participants appear increasingly responsive to macroeconomic signals, with coordinated movements across traditional and crypto markets suggesting a recalibration of investment strategies in light of improving global trade dynamics.

As geopolitical risks ease and traditional markets recover, Bitcoin’s reduced exchange reserves and growing off-exchange holdings may create favorable conditions for another test of its all-time high in the coming weeks.

The coming period will be crucial in determining whether current capital flows translate into a full breakout beyond previous records or lead to a period of price consolidation.

BTC price on Bitstamp chart 1W in USD

Recently, there has been a significant move in BTC. It pulled back from the 105k level and is now back below 103k.

Is this the start of a correction?

It’s certainly possible.

The time frame for a correction to occur also seems to fit.

The last major time frame that completed was the 3rd wave of 1 on the 4th degree.

The 5th wave of 1 on the 4th degree is now due to complete, and that will likely take some time yet.

It’s also worth noting that a 90+ day candle has just completed on the 3rd degree, and these candles usually like to trade in complete at least one full cycle.

So far, the candle is still in play, and it’s possible that the price could continue to rally and test the all-time high again before the 90+ day candle closes.

However, if the price does start a correction from here, it could be a time for traders to take some profits and step back from the market.

It will be interesting to see how the market develops in the coming days and weeks.

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