The price of Bitcoin (BTC) has surpassed $78,000, bolstering the broader cryptocurrency market, as risk sentiment improves following the extension of the ceasefire between the U.S. and Iran by President Donald Trump. This development has ended weeks of volatile trading between $65,000 and $75,000, providing momentum traders with the catalyst they had been anticipating.
Momentum traders typically buy when there is evidence of an upward trend, and Bitcoin's recent breakout is a clear indication of this, potentially attracting more buyers and adding to the momentum. According to analysts at Marex, 'The market spent months capped in the 65 to 75 range.
Breaking out of that kind of 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 support this view, with the number of coins held in wallets tied to centralized exchanges dropping to a fresh multi-year low of 2.67 million BTC, according to CryptoQuant, suggesting continued investor accumulation that could lead to a supply shock. Delta Exchange noted, '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 advises 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 are currently tied to the price of oil and the interest-rate outlook, 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, having rebounded from a low of $78 on Friday. Meanwhile, DeFi security risks persist due to the proliferation of hacks, with the Sui-based Volo protocol being drained of over $3 million, just days after the KelpDAO event.
The chart shows bitcoin's daily price movements, with the price establishing a firm foothold above the 100-day average, a pivotal development as it typically signals a strengthening of bullish momentum.