The world’s largest cryptocurrency, Bitcoin (BTC), experienced a 2% surge in the past 24 hours, bringing its price to $26,332 and its market capitalization to $512 billion. This upward movement comes as a relief, considering the significant selling pressure Bitcoin has faced in recent weeks.
However, this price increase may present a sell-the-rise opportunity, as indicated by the rise in deposits on exchanges. Santiment, an on-chain data provider, reported that the supply of Bitcoin on exchanges has reached a two-week high. In the last 24 hours alone, over 5,000 Bitcoins, equivalent to a staggering $128.5 million, have been sent to exchanges.
While Bitcoin’s price has seen a modest 2% rise, reaching $26.3K once again after a week, it is crucial to monitor the supply of BTC on exchanges, which has grown by 3.1% in the past two weeks. Traders appear to be motivated by the desire to secure modest profits, according to Santiment.
Investors should keep a close eye on the $26,000 level following the recent bounceback. Currently, Bitcoin’s price is forming a double-top pattern, suggesting potential further downside. However, if the price manages to hold above $26,000, the double-top theory will be invalidated.
Regarding potential corrections, it is important to note that $25,500 serves as a significant support level for Bitcoin. Additionally, Bitcoin is following a pattern that it typically exhibits a few months before halving. Historically, August and September have been challenging periods for Bitcoin in the year preceding halving.
Crypto analyst Stack Hodler explains that we are nearing the end of a significant debt cycle, and governments will continue to devalue currencies to meet their debt obligations. Assets with limited supplies, immune to confiscation and devaluation, such as Bitcoin, are expected to perform well in the long term. Conversely, assets susceptible to seizure and devaluation, like sovereign debt, are likely to fare poorly. For instance, TLT, a popular sovereign debt asset, has experienced a 43% decline since the Covid outbreak, while Bitcoin has surged by 342% during the same period.