The price of Bitcoin (BTC) has surged past $78,000, boosting the overall cryptocurrency market. This upward movement occurred as risk appetite improved following the extension of the ceasefire with Iran by U.S. President Donald Trump, also leading to gains in stock index futures. After weeks of volatile trading between $65,000 and $75,000 in March and early April, Bitcoin's ascent has given momentum traders the breakthrough they were anticipating.
Momentum traders typically invest when they observe evidence of an upward trend, and Bitcoin's recent breakout is a clear indication of this. As a result, more buyers may enter the market, further amplifying the momentum. Analysts at Marex noted that the market had been confined to a range of $65 to $75 for months, and breaking out of this range is significant as it alters investor behavior. Sellers who were previously comfortable selling during rallies above $74 now need to reassess their strategy, while momentum buyers who were waiting for confirmation have finally received something to support their investment decisions.
On-chain indicators also suggest the same trend. For instance, the number of coins held in wallets linked to centralized exchanges has dropped to a fresh multi-year low of 2.67 million BTC, according to CryptoQuant. This indicates continued investor accumulation, which could ultimately lead to a supply shock.
Delta Exchange stated that the supply of Bitcoin on exchanges continues to decrease, resulting in fewer coins available for sale, more BTC being transferred to long-term holders, and tightening liquidity. However, QCP Capital is advising caution due to the persistent relative richness of Bitcoin put options on Deribit, which are used as a hedge against potential price drops. The firm noted that crypto trends currently appear to be tied to the price of oil and the interest-rate outlook. In traditional markets, WTI crude futures are trading around $90 after bouncing back from a low of $78 on Friday.
Meanwhile, DeFi security risks remain a concern due to the proliferation of hacks. The Sui-based Volo protocol was recently drained of over $3 million, just days after the KelpDAO event caused collateral damage across the sector.
For more analysis of today's activity in altcoins and derivatives, see Crypto Markets Today, and for a comprehensive list of events this week, see CoinDesk's Crypto Week Ahead.