The cryptocurrency market has been on a hot streak in the past few days, with several large-cap assets posting significant gains in the past week. Most notably, the Bitcoin price bounced back from around $61,000 to above $67,000 for the first time in nearly a month.
As expected, this latest price movement has sparked a lot of speculation and discussion around the premier cryptocurrency. Popular blockchain analytics firm CryptoQuant has shared on-chain insights into the recent Bitcoin price rally and its future trajectory.
How Did Bitcoin Price Reach $67,000?
In a recent report, CryptoQuant revealed the catalyst and on-chain manifestations behind BTC’s latest rally to above $67,000. According to the analytics firm, the price of Bitcoin rode to its new highs on the back of the news of lower-than-expected inflation in the United States.
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The inflation data released on Wednesday, May 15 showed that the Consumer Price Index (CPI) rose by 0.3% in April – lower than the expected 0.4%. This revelation suggested that inflation might be on a downward slope in the US, making risky assets like Bitcoin more attractive.
🧵 #Bitcoin‘s price has rallied from $60K to around $66K, driven by lower-than-expected US inflation and reduced selling pressure.
Let’s look into the details ⬇️
— CryptoQuant.com (@cryptoquant_com) May 17, 2024
In its report, CryptoQuant revealed that there has been a decreased selling pressure in the BTC market, as short-term holders are selling at low or negative profits. Meanwhile, Bitcoin balances at over-the-counter (OTC) desks have steadied, implying that fewer coins are entering the open market.
What’s more, the analytics platform highlighted a particular on-chain signal that might have predicted the recent Bitcoin price rally. According to CryptoQuant, BTC miners have been extremely underpaid over the past few weeks, which often correlates with price bottoms.
The Catalysts For Sustained BTC Rally?
CryptoQuant, in its report, identified potential catalysts for a continued rally for the Bitcoin price. According to the on-chain data company, demand from permanent holders and largest investors is on the rise but it needs to climb rapidly to push the price of BTC even higher.
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Furthermore, the latest data shows that Bitcoin ETF (exchange-traded funds) purchases have dwindled to nearly zero daily, while stablecoin liquidity growth is also on a decline. CryptoQuant noted that these two metrics need a jolt, which might be critical for a sustained Bitcoin rally.
As of this writing, the Bitcoin price continues to hover around $67,000, reflecting a 2.5% increase in the past 24 hours. According to CoinGecko data, the premier cryptocurrency is up by a significant 10% in the past week.
Featured image from iStock, chart from TradingView