Bitcoin Momentum Traders Receive Long-Awaited Signal

The bitcoin price, currently at $76,327.32, has surpassed $78,000, boosting the broader cryptocurrency market. This development follows an improvement in risk sentiment after US President Donald Trump extended the ceasefire with Iran, also leading to gains in stock index futures. The cryptocurrency's ascent has ended the choppy trading period between $65,000 and $75,000 seen in March and early April, providing momentum traders with the green light they had been anticipating. Momentum traders typically buy when they observe evidence of an upward trend, and bitcoin's breakout serves as proof of this trend. As a result, more buyers may enter the market, further amplifying the momentum. According to the first law of motion, an object in motion remains in motion until acted upon by an external force, a principle that, although not originally intended for financial markets, holds relevance. Analysts at Marex noted, 'The market spent months capped in the 65 to 75 range. Breaking out of that kind of range matters because it changes behavior. Sellers who were comfortable fading rallies above 74 now have to reassess. Momentum buyers who were waiting for confirmation finally have something to lean on.' On-chain indicators also support this outlook. For instance, the number of coins held in wallets tied to 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. 'Bitcoin supply on exchanges continues to shrink, with fewer coins available to sell, more BTC moving to long-term holders, and liquidity tightening. Bitcoin is becoming increasingly scarce – supply down means volatility up,' Delta Exchange stated. However, QCP Capital is urging caution, citing the persistent relative richness of bitcoin put options on Deribit. Puts are used as a hedge against potential price drops in the underlying asset. The firm added that crypto trends currently seem tied to the price of oil and the interest-rate outlook. 'The path forward remains anchored to oil and policy. A move lower in crude or clearer Fed signaling would support risk. Absent that, markets are likely to remain in a holding pattern, pricing uncertainty rather than resolution,' the Singapore-based firm said in a market update. In traditional markets, WTI crude futures are trading around $90, having bounced from a low of $78 on Friday. Meanwhile, DeFi security risks persist as hacks continue to occur. The Sui-based Volo protocol was recently drained of over $3 million, just days after the KelpDAO event caused collateral damage across the sector. For more analysis of today's activity in altcoins and derivatives, see Crypto Markets Today. For a comprehensive list of events this week, see CoinDesk's 'Crypto Week Ahead.' The chart shows bitcoin's daily price movements in candlestick format, with lines indicating the 100-day and 200-day average prices. Bitcoin's price has established a firm foothold above the 100-day average, represented by the white line. This is pivotal because the 100-day average capped the bounce in January, following which sellers re-established control, leading to a deeper crash to nearly $60,000. Now that the price has pierced through, which typically signals a strengthening of bullish momentum, focus shifts to the 200-day average, currently positioned at $85,900.