bitcoin [BTC] After starting the week in a very bearish fashion, the tide is turning again. It looks like we might get a little relief this time around. Especially now that whales are back accumulating after significant discounts.
BTC whale activity has increased over the past two days, according to a pseudonymous CryptoQuant analyst Martin. The analysis noted a mean increase in BTC transfer flows from all exchanges to derivatives exchanges. According to his analysis,
“A higher or increased amount indicates that more whales are depositing on derivatives exchanges.”
Source: CryptoQuant
Of course, the accumulation of whales is bound to trigger increased buying pressure and subsequent price increases. This may explain BTC’s mid-week rally from the Sept. 7 low of $18,510 to $19,285. The latter is also in line with support in July.
BTC and external factors
There are other factors supporting BTC’s current rise. For example, the US dollar index has experienced a sharp pullback in the past 24 hours after being briefly oversold.
Many investors have been looking to the U.S. dollar as their first choice when commodity markets crashed. So, when the dollar index starts to show signs of weakness, traders are bound to start dipping into their cash reserves.
The interesting thing is that the US dollar index is in line with the downtrend of the RSI and thus was rejected.
Short-term stock market rebound into next week’s CPI data release? pic.twitter.com/4ALJkNlHiY
— Lark Davis (@TheCryptoLark) September 7, 2022
After a brief dip into oversold territory, BTC’s modest recovery is not surprising. Therefore, it makes sense to observe liquidity flowing from USD to Bitcoin.
On-chain, we can see that the inflow is higher than the outflow. There are currently more receiving addresses than sending addresses, so there is a net positive demand from September 4th.
Source: Glassnode
The combination of these factors confirms that BTC is currently experiencing a wave of demand. However, this does not guarantee the end of the bearish short-term trend. The recent bearish state of the market is due to concerns about inflation and the larger state of the economy.
On the other hand, the long-term outlook remains bullish. Savvy analysts like Panthera Capital’s Dan Morehead are doubling down on BTC’s bullish narrative.
Dan in the latest Bloomberg Interview Bitcoin has started its next rally phase. He also expects it to be bumpy at first, which means traders should expect some pullbacks on the way up.
Additionally, Dan’s view on BTC’s macro outlook is in line with many analysts’ expectations. However, investors should note that black swan events are commonplace in the crypto market.
Therefore, investors should consider the possibility of another major crash and prepare for such an outcome.
