The bitcoin price has surged past $78,000, boosting the overall cryptocurrency market, as risk appetite improved following the extension of the US-Iran ceasefire by President Donald Trump. This move has ended the period of volatile trading between $65,000 and $75,000 seen in March and early April, giving momentum traders the long-awaited signal to enter the market. Momentum traders typically buy when they see evidence of an upward trend, and bitcoin's recent breakout is a clear indication of this.
As a result, more buyers may enter the market, further fueling the momentum. Analysts at Marex note that the market's breakout from the $65-$75 range is significant, as it changes investor behavior. Sellers who previously sold rallies above $74 must now reassess, while momentum buyers have finally received the confirmation they were waiting for. On-chain indicators also suggest continued investor accumulation, which could lead to a supply shock.
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 points to a scarcity of bitcoin, which could lead to increased volatility.
However, QCP Capital urges caution, citing the persistent relative richness of bitcoin put options on Deribit. The firm notes that crypto trends are currently tied to the price of oil and the interest-rate outlook, and that the path forward remains uncertain. In traditional markets, WTI crude futures are trading around $90, having bounced from a low of $78 on Friday.
Meanwhile, DeFi security risks remain a concern, with the Sui-based Volo protocol being drained of over $3 million just days after the KelpDAO event. The bitcoin price has established a firm foothold above the 100-day average, which is a pivotal level, as it capped the bounce in January and led to a deeper crash to nearly $60,000. Now that the price has pierced through this level, focus shifts to the 200-day average, currently positioned at $85,900.