Long-Awaited Momentum Signal Arrives for Bitcoin Traders

The price of Bitcoin (BTC) has surged past $78,000, bolstering the broader cryptocurrency market, as risk appetite improved following the extension of the ceasefire between the US and Iran by President Donald Trump. This development also led to gains in stock index futures. After weeks of volatile trading within the $65,000 to $75,000 range in March and early April, Bitcoin's ascent has finally given momentum traders the catalyst they were anticipating. Momentum traders typically enter the market when there's evidence of an upward trend. The recent breakout of Bitcoin serves as that proof, potentially attracting more buyers and further amplifying the momentum. According to analysts at Marex, the prolonged period during which the market was capped between $65 and $75 is significant. The breakout from this range is crucial as it influences market behavior. Sellers who previously sold rallies above $74 must now reassess their strategy. Meanwhile, momentum buyers who were awaiting confirmation now have a basis for their investment decisions. On-chain data supports this view. For instance, the number of Bitcoins held in wallets associated with centralized exchanges has dropped to a multi-year low of 2.67 million, according to CryptoQuant. This indicates ongoing investor accumulation, which could eventually lead to a supply shock. Delta Exchange noted that the decreasing supply of Bitcoin on exchanges, with fewer coins available for sale and more being transferred to long-term holders, is leading to tightened liquidity. This scarcity could increase volatility. However, QCP Capital advises caution, pointing to the persistent richness of Bitcoin put options on Deribit, which are used as a hedge against potential price drops. The firm notes that crypto trends are currently linked to oil prices and interest rate expectations. The path forward, according to QCP Capital, remains tied to oil prices and policy decisions. A decrease in crude oil prices or clearer signaling from the Fed could support risk appetite. Without these factors, markets may remain uncertain, pricing in ambiguity rather than resolution. In traditional markets, WTI crude futures are trading around $90, having rebounded from a low of $78 on Friday. DeFi security risks persist due to the proliferation of hacks. The Sui-based Volo protocol was recently drained of over $3 million, just days after the KelpDAO incident, which caused widespread damage across the sector. For further analysis of today's altcoin and derivatives activity, see Crypto Markets Today. For a comprehensive list of upcoming events, refer to CoinDesk's Crypto Week Ahead. Today's key signal is the establishment of Bitcoin's price above the 100-day average, represented by the white line on the chart. This is significant because the 100-day average previously capped the bounce in January, leading to a deeper crash to nearly $60,000. Now, with the price having broken through this average, the focus shifts to the 200-day average, currently at $85,900.