Bitcoin Price to Recover Soon? This Popular Indicator Gives Hints
The crypto market tumbled significantly as geopolitical tensions escalated after Iran launched missile strikes on Israel. Bitcoin, for one, dropped below $60,500 before staging a modest recovery.
Despite this, demand from United States-based investors remains high, according to recent findings. Such a trend could provide Bitcoin with a respite from the bears.
US Investor Demand Remains Strong
In an October 3 post, CryptoQuant noted the chance of a short-term Bitcoin price increase.
The Coinbase Premium Index signals a potential short-term increase in Bitcoins price. By tracking the 1-hour time frame and comparing the 24-hour and 168-hour moving averages, CryptoQuant analyst Yonsei_dent found that a bullish indicator has emerged when the daily moving average forms a golden cross over the weekly.
At present, the daily average has temporarily surpassed the weekly average, with the gap between the two narrowing, suggesting upward momentum. Historically, this pattern has led to short-term price increases, as seen on October 1st, when strong US investor demand pushed Bitcoin higher despite a correction.
The current rise in Coinbase Premium indicates a similar scenario, with growing demand from US-based investors potentially indicating a recovery in Bitcoins price.
Bitcoin Sees Record Outflows from Exchanges
Adding to this bullish thesis, another analysis by CryptoQuant revealed that Bitcoin has experienced its largest outflow from exchanges since November 2022, signaling a shift in market sentiment.
On-chain data shows a marked increase in outflows, with the 30-, 50-, and 100-day moving averages all reflecting this trend. A significant outflow typically indicates that investors are moving their Bitcoin to private wallets, reducing the supply on exchanges, which can create much-needed upward pressure on the price of the asset.
This trend often suggests that investors are confident in Bitcoins long-term potential, opting to hold rather than trade, which may be a bullish indicator for future market activity.
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