Bitcoin Momentum Traders Get Long-Awaited Signal to Buy

The price of bitcoin, currently at $75,987.36, has surged past $78,000, boosting the overall cryptocurrency market. This upward movement occurred as investor sentiment improved following the extension of the ceasefire between the US and Iran by President Donald Trump, also leading to gains in stock index futures. After weeks of volatile trading between $65,000 and $75,000 in March and early April, bitcoin's ascent has given momentum traders the signal they were waiting for to invest. Momentum traders typically buy when they see evidence of an upward trend. The recent breakout in bitcoin serves as this proof, potentially attracting more buyers and adding to the momentum. According to the first law of motion, once an object is in motion, it remains so until acted upon by an external force. Analysts at Marex noted that the market had been confined to the $65 to $75 range for months, and breaking out of this range is significant as it changes market behavior. Sellers who previously sold rallies above $74 must now reassess, while momentum buyers waiting for confirmation now have a basis to invest. On-chain indicators also suggest the same trend. For example, the number of coins held in wallets associated with centralized exchanges has dropped to a fresh multi-year low of 2.67 million BTC, indicating continued investor accumulation that could lead to a supply shock. Delta Exchange stated that the shrinking supply of bitcoin on exchanges, with fewer coins available for sale and more BTC moving to long-term holders, means that bitcoin is becoming increasingly scarce, which could lead to increased volatility. However, QCP Capital is urging caution, pointing out the persistent richness of bitcoin put options on Deribit, which are used to hedge against potential price drops. The firm notes that crypto trends are currently tied to the price of oil and interest rates. In traditional markets, WTI crude futures are trading around $90 after bouncing from a low of $78 on Friday. Meanwhile, 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 event caused collateral damage across the sector. For more analysis on 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.