Bitcoin Momentum Traders Receive Long-Awaited Signal

The bitcoin price, currently at $78,347.01, has surpassed the $78,000 threshold, thereby bolstering the broader cryptocurrency market. This development follows an improvement in risk sentiment, prompted by U.S. President Donald Trump's decision to extend the ceasefire with Iran, which 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 upward trend has given momentum traders the catalyst they were waiting for. Momentum traders typically buy when an upward trend is confirmed, and bitcoin's recent breakout may attract more buyers, further amplifying the momentum. According to analysts at Marex, the market's prolonged period within the $65 to $75 range has ended, which is significant as it alters investor behavior. Sellers who previously sold rallies above $74 must now reassess, while momentum buyers have finally received the confirmation they needed. On-chain indicators also suggest the same trend. For instance, the number of coins held in wallets associated with 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 lead to a supply shock. Delta Exchange noted that the shrinking bitcoin supply on exchanges, with fewer coins available for sale and more BTC being transferred to long-term holders, is resulting in increased scarcity and potential volatility. However, QCP Capital is advising caution due to the persistent relative richness of bitcoin put options on Deribit, which are used to hedge against potential price drops. The firm also noted that crypto trends appear to be linked to oil prices and interest-rate expectations. In traditional markets, WTI crude futures are trading around $90 after bouncing from a low of $78 on Friday. The broader market continues to face DeFi security risks due to the proliferation of hacks. Earlier today, the Sui-based Volo protocol was drained of over $3 million, just days after the KelpDAO event caused collateral damage across the sector. For further analysis of today's altcoin and derivatives activity, see Crypto Markets Today, and for a comprehensive list of this week's events, see CoinDesk's Crypto Week Ahead. Today's signal is that bitcoin's daily price has established a strong foothold above the 100-day average, which is a pivotal development as it previously capped the bounce in January. Now, the focus shifts to the 200-day average, currently positioned at $85,900.