Bitcoin Momentum Traders Receive Long-Awaited Signal

The bitcoin price, currently at $79,035.97, has surpassed the $78,000 threshold, propelling the broader cryptocurrency market upward. This surge occurred amidst improved risk sentiment following the extension of the ceasefire with Iran by U.S. President Donald Trump, accompanied by gains in stock index futures. The cryptocurrency's ascent has put an end to the choppy trading that persisted between $65,000 and $75,000 throughout March and early April, providing momentum traders with the long-awaited signal to enter the market. Momentum traders typically invest when an upward trend is confirmed, and bitcoin's recent breakout serves as a catalyst for potential further investment, thereby amplifying the momentum. According to the first law of motion, an object in motion remains so until acted upon by an external force. Analysts at Marex noted, 'The market had been confined to the $65 to $75 range for months. Breaking out of this range is significant as it alters behavior. Sellers who previously felt comfortable shorting rallies above $74 must now reassess. Momentum buyers who were waiting for confirmation finally have a basis to lean on.' On-chain indicators support this view. 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 suggests continued investor accumulation, potentially leading to a supply shock. 'Bitcoin supply on exchanges continues to shrink, with fewer coins available for sale, more BTC moving to long-term holders, and liquidity tightening. Bitcoin is becoming increasingly scarce – reduced supply translates to increased volatility,' Delta Exchange stated. However, QCP Capital advises caution, citing the persistent relative richness of bitcoin put options on Deribit. The firm notes that crypto trends currently appear tied to oil prices and the interest-rate outlook. 'The path forward remains tied to oil and policy. A decrease in crude prices or clearer Fed signaling would support risk. In the absence of this, markets are likely to remain in a holding pattern, pricing uncertainty rather than resolution,' QCP Capital said in a market update. In traditional markets, WTI crude futures are trading around $90, having rebounded from a low of $78 on Friday. The broader market continues to face DeFi security risks, with hacks on the rise. The Sui-based Volo protocol was recently drained of over $3 million, just days after the KelpDAO incident caused collateral damage across the sector. For analysis of today's altcoin and derivatives activity, see Crypto Markets Today. For a comprehensive list of this week's events, refer to CoinDesk's 'Crypto Week Ahead.' The chart illustrates bitcoin's daily price movements, with lines indicating the 100-day and 200-day average prices. Bitcoin's price has established a firm foothold above the 100-day average, which previously capped the bounce in January. This development signals a strengthening of bullish momentum, shifting focus to the 200-day average, currently positioned at $85,900.