Bitcoin pushed above $78,000, lifting the broader crypto market. The move comes as risk sentiment improved after US President Donald Trump extended the ceasefire with Iran. Stock index futures also rose.
The cryptocurrency’s rise ended the choppy weeks of trading between $65,000 and $75,000 that defined March and early April, finally giving momentum traders the green signal they’ve been waiting for.
Momentum traders buy when they see evidence that an uptrend is underway. Bitcoin’s breakthrough is exactly that, and more buyers could pile in as a result, adding to the momentum. As the first law of motion says: an object in motion stays in motion until an external force acts on it, although Sir Isaac Newton may not have been thinking about financial markets at the time.
“The market has spent months capped in the 65-75 box. Breaking out of this kind of range is important because it changes behavior. Sellers who were comfortable with fading bounces above 74 now need to reassess. Momentum buyers who have been waiting for confirmation finally have something to fall back on,” Marex analysts said.
Onchain indicators suggest the same. For example, the number of coins held in wallets linked to centralized exchanges fell to a new multi-year low of 2.67 million BTC, according to data source CryptoQuant. This indicates continued investor accumulation, which could lead to a supply shock.
“The supply of Bitcoin on exchanges continues to decline, with fewer coins available for sale, more BTC transferred to long-term holders, and a tightening of liquidity. Bitcoin is becoming increasingly scarce – a drop in supply means an increase in volatility,” Delta Exchange said on X.
Nonetheless, QCP Capital urges caution, noting the continued relative wealth of bitcoin put options on Deribit. Puts are used as a hedge against possible falls in the price of the underlying asset. He added that crypto trends currently appear linked to the price of oil and the outlook for interest rates.
“The path forward remains anchored in oil and politics. A decline in crude or a clearer signal from the Fed would support risk. Without this, markets are likely to remain in a holding pattern, valuing uncertainty over resolution,” the Singapore-based firm said in a market update.
In traditional markets, WTI crude futures are trading around $90, having rebounded from a low of $78 on Friday.
In the broader market, DeFi security risks remain an issue as hacks increase. Early today, the Sui-based Volo protocol lost over $3 million just days after the KelpDAO event that caused collateral damage across the industry. Stay vigilant!
Read more: For analysis of current altcoin and derivatives activity, see Crypto Markets Today. For a full list of this week’s events, check out CoinDesk’s “Crypto Week Ahead.”
What is the trend
This is an excerpt from the CoinDesk “Daybook” newsletter. Register here, if you haven’t already.
Signal of the day
The chart shows daily Bitcoin price movements in candlestick form, with lines showing 100- and 200-day average prices.
BTC price has firmly established itself above the 100-day average, represented by the white line. This is crucial because the 100-day average limited the January rebound, after which sellers reestablished control, leading to a deeper crash to near $60,000.
Now that price has broken through, which typically signals strengthening bullish momentum, attention shifts to the 200-day average, currently positioned at $85,900.
