Bitcoin Traders Receive Long-Awaited Momentum Signal

The bitcoin price, currently at $77,667.62, has surpassed $78,000, boosting the overall cryptocurrency market. This move follows an improvement in risk sentiment after U.S. President Donald Trump extended the Iran ceasefire, with stock index futures also seeing gains. The cryptocurrency's ascent has ended weeks of volatile trading between $65,000 and $75,000, providing momentum traders with the green light they had been anticipating. Momentum traders typically buy when an upward trend is confirmed, and bitcoin's breakout serves as such a signal, potentially attracting more buyers and adding to the momentum. According to the first law of motion, once an object is in motion, it remains so until acted upon by an external force. Analysts at Marex noted, 'The market spent months capped in the 65 to 75 range. Breaking out of that range matters because it changes behavior. Sellers who were comfortable fading rallies above 74 now have to reassess. Momentum buyers who were waiting for confirmation finally have something to lean on.' On-chain indicators also suggest the same, with the number of coins held in wallets tied to centralized exchanges dropping to a multi-year low of 2.67 million BTC, indicating continued investor accumulation that could lead to a supply shock. CryptoQuant data supports this, pointing to a significant decrease in available coins for sale and an increase in coins moving to long-term holders, resulting in tightened liquidity. Delta Exchange commented, 'Bitcoin supply on exchanges continues to shrink, with fewer coins available to sell, more BTC moving to long-term holders, and liquidity tightening. Bitcoin is becoming increasingly scarce – supply down means volatility up.' However, QCP Capital is urging 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 seem tied to oil prices and interest-rate outlooks, stating, 'The path forward remains anchored to oil and policy. A move lower in crude or clearer Fed signaling would support risk. Absent that, markets are likely to remain in a holding pattern, pricing uncertainty rather than resolution.' In traditional markets, WTI crude futures are trading around $90 after bouncing back from a low of $78 on Friday. The broader market continues to face DeFi security risks, with the Sui-based Volo protocol being drained of over $3 million, just days after the KelpDAO event caused damage across the sector. Read more about today's altcoin and derivatives activity in Crypto Markets Today, and find a comprehensive list of this week's events in CoinDesk's Crypto Week Ahead. This excerpt is from the CoinDesk newsletter 'Daybook.' Sign up here if you haven't already. Today's signal is shown on the chart, which displays bitcoin's daily price movements in candlestick format, with lines indicating the 100-day and 200-day average prices. The price has established a firm foothold above the 100-day average, represented by the white line, which is pivotal as it capped the bounce in January, leading to a deeper crash to nearly $60,000. Now that the price has pierced through, it typically signals a strengthening of bullish momentum, with focus shifting to the 200-day average, currently positioned at $85,900.