Bitcoin price appears to be on the verge of a significant breakout as recent on-chain data points to a surge in demand and token transfer volume.
This trend suggests that the prolonged period of consolidation may be nearing its end, with potential bullish momentum building up. According to an analysis by CryptoQuant’s Alex Adler Jr., the increase in Bitcoin’s daily token transfer volume points to this shift.
For context, Bitcoin’s recent price movements show resilience, especially after the drop below $50,000 on Aug. 5. Despite the market’s volatility, Bitcoin has managed to recover some of its losses.
An intraday spike of nearly 12% on August 8 brought the price closer to $60,000, although it faced significant selling pressure as it approached $62,000. This period of volatility has led to a phase of consolidation, during which the price hovered between $57,000 and $68,000.
Bitcoin Sees Spike in Daily Token Transfer Volume
As prices look to break out, Adler called attention to Bitcoin’s daily token transfer volume, which rose from 650,000 BTC to 765,000 BTC as Bitcoin reclaimed the $57,000 level.
This increase in transfer volume is noteworthy as it coincides with the price stabilization within the $57,000 to $68,000 range. Such an uptick often signals heightened market activity, suggesting increased trading and movement of assets on the blockchain.
In this context, the rising transfer volume points to a trend of panic selling from a cohort of addresses. However, it also indicates renewed interest from investors looking to capitalize on Bitcoin’s current price levels.
In the token transfer chart, the 30-day moving average has started to diverge from the 365-day moving average, suggesting a short-term increase in transfer volume.
Increased Demand
Adler believes this rise in transfer volume at the $57,000 mark indicates sustained demand for Bitcoin, particularly among investors who see current prices as a buying opportunity. Interestingly, The Crypto Basic recently confirmed that whales have procured nearly 95K BTC in six weeks.
The steady demand at this price level supports the notion that the market is absorbing selling pressure without significant price declines. Considering traditional market trends, such a pattern suggests a potential bullish reversal.
As Bitcoin continues to consolidate, the key levels to watch are $61,000 and $62,726. A break above these levels could trigger a new wave of buying, potentially pushing Bitcoin towards $70,000. Conversely, if Bitcoin faces another correction, it must hold above $55,436 to avoid further downside.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author’s personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
