Bitcoin has risen above $23,000 for its first time since 13 Juni, thanks to a bullish performance over the past seven days. BTC enthusiasts who are keen observers may have noticed that Bitcoin moved out of the narrow range it was locked in for four weeks.
BTC must compete with BTC above $28,000. But, is the market favorable to propel BTC to its next critical level of dominance? Let’s see.
Bitcoin’s recent performance indicates that investors are dealing with the “fear of missing out” on Bitcoin.
The Fear and Greed index stood at 31. This is still in fear territory but can be seen as a significant improvement over last month.
This is to be understood in context. The same index was in extreme fear territory approximately four weeks ago and as low as nine.
A rise in the score does not necessarily indicate that there is enough demand for Bitcoin to return to its previous levels.
ETFs remain on the sidelines
During the sharp fall in Bitcoin’s price, there were large outflows from 3IQ Coinshares ETFs and Purpose Bitcoin ETFs. These ETFs have been relatively quiet since then, but they are likely to increase their activity and fuel recovery to May levels.
It is important to consider that there may be strong demand from other countries. The market’s current demand for Bitcoin can be gauged by exchange inflows or outflows.
According to Glassnode data, exchange outflows rose from 14,542 Bitcoin to 42,390 Bitcoin between 16 and 19. July. However, exchange inflows rose from 16,313 BTC and 39,329 BTC over the same time.
Inflows to the exchange have been significantly higher than outflows. At press time, however, the difference between outflows and inflows of exchange was very small.
This indicates that BTC’s demand may not be as strong. The good news is that the demand for Bitcoin has been low. However, whales have been buying Bitcoin over the past few days.
As of 19 July, 99 addresses had more than 10,000 BTC. This is an increase of three addresses since 4 July.
Bitcoin only had over 10,000 BTC addresses at its highest during the mid-June dip. This could be a sign that whale sentiment has improved at current price levels.
Bitcoin has much more work to do to return to May levels even after the recent rally. There will be profit taking along this path.