Bitcoin Momentum Traders Get the Green Light

Bitcoin has surged past $78,000, boosting the entire cryptocurrency market, as risk appetite improved following the extension of the US-Iran ceasefire by President Donald Trump. This move has ended weeks of volatile trading between $65,000 and $75,000, providing momentum traders with the long-awaited signal to enter the market. Momentum traders typically buy when an upward trend is confirmed, and Bitcoin's recent breakout is a clear indication of this. According to Newton's first law of motion, an object in motion remains in motion unless acted upon by an external force, which could be applied to financial markets. Analysts at Marex noted that the market had been capped between $65 and $75 for months, and breaking out of this range is significant as it changes market behavior. Sellers who were previously comfortable selling rallies above $74 must now reassess, while momentum buyers have finally received the confirmation they were waiting for. On-chain indicators also suggest the same, with the number of coins held in wallets tied to centralized exchanges dropping to a fresh multi-year low of 2.67 million BTC, indicating continued investor accumulation. Bitcoin supply on exchanges is shrinking, with fewer coins available for sale, more BTC moving to long-term holders, and liquidity tightening, making Bitcoin increasingly scarce. However, QCP Capital is urging caution due to the persistent relative richness of Bitcoin put options on Deribit. The path forward remains tied to oil prices and interest rate expectations. In traditional markets, WTI crude futures are trading around $90, having bounced back 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. The chart shows Bitcoin's daily price movements, with the price establishing a firm foothold above the 100-day average, which is a pivotal level as it capped the bounce in January. Now, the focus shifts to the 200-day average, currently positioned at $85,900.