The price of Bitcoin (BTC) has surged past $78,000, bolstering the broader cryptocurrency market, as risk sentiment improves following the extension of the ceasefire between the US and Iran by President Donald Trump. This upward movement marks the end of weeks of volatile trading between $65,000 and $75,000, providing momentum traders with the catalyst they had been anticipating.
Momentum traders typically invest when there is evidence of an upward trend, and Bitcoin's recent breakout could attract more buyers, thereby increasing momentum. According to analysts at Marex, the breakout from the $65-$75 range is significant as it alters market behavior, with sellers reassessing their positions and momentum buyers gaining confidence.
On-chain data from CryptoQuant also suggests continued investor accumulation, with the number of coins held in wallets tied to centralized exchanges dropping to a multi-year low of 2.67 million BTC, potentially leading to a supply shock. However, QCP Capital urges caution due to the persistent relative richness of Bitcoin put options on Deribit, indicating that crypto trends are currently influenced by oil prices and interest-rate expectations. In traditional markets, WTI crude futures are trading around $90, while DeFi security risks persist due to the proliferation of hacks, including the recent $3 million drain from the Sui-based Volo protocol.