Bitcoin’s price hit new highs of over $73,000 on March 12 as the pioneering cryptocurrency entered the price discovery phase.
Institutional demand for Bitcoin continues to rise despite prices trending toward historic highs. On-chain data analysis examines the key catalysts behind the latest BTC price rally observed on March 12.
Bitcoin Market Stock Tightens, Investors Move BTC To Cold Storage
Bitcoin’s market cap briefly crossed the $1.5 trillion mark in the early hours of March 12 as prices rose to a new global high of $72,967. Bullish announcements from BlackRock and MicroStrategy, two of the largest BTC institutional holders, set the narrative for the latest BTC price rally this week.
First, according to its recent filing with the United States Securities and Exchange Commission (SEC), BlackRock outlined plans for its Global Allocation Fund (MALOX) to include spot Bitcoin ETFs in its portfolio. While this decision is still weeks or months away, it raised hopes of more demand for Blackrock’s IBIT ETF, which already held more than 204,000 BTC on March 12.
In the same vein, Michael Saylor, CEO and co-founder of MicroStrategy, also announced the purchase of an additional 12,000 BTC, bringing his total holdings to 205,000 BTC.
While the two key events dominated the media headlines, on-chain data revealed how traders’ positive reactions drove the price increase.
IntoTheBlock’s exchange net flow metric tracks the difference between deposits and withdrawals made across crypto exchanges on a given day. A negative exchange rate net flow often positively affects prices in the short term, as it means more coins are withdrawn from the market supply.
The chart above shows how Bitcoin holders moved 4,470 BTC, worth $520 million, from wallet-hosted wallets to cold storage on March 11. This implies that despite Bitcoin prices trending toward record highs, investors continue to play the long game and cold-storage coins rather than looking for short-term profit-taking opportunities.
Negative exchange net flows essentially reduce the number of coins readily available to trade on the spot markets. When this coincides with a surge in market demand, it often puts upward pressure on the asset price.
Bitcoin was trading at around $72,000 on March 12, meaning that over $520 million worth of BTC was removed from the market supply within the last 24 hours.
Notably, February 27 was the last time BTC recorded higher levels of exchange withdrawals, with a net flow of 8,050 BTC recorded. As expected, the BTC price increased by 26% within 48 hours from $50,900 to $63,900.
If this bullish pattern repeats, the 4,750 BTC outflows recorded on March 11 could clear the way for Bitcoin price to break above $75,000 in the days ahead.
Bitcoin (BTC) Price Prediction: Imminent Breakout Above $75,000?
Critical market trends suggest that Bitcoin’s price may be on the verge of another upswing in the coming days. Confirming this position, IntoTheBlock’s global in/out money chart shows that with Bitcoin now in the price discovery phase, virtually 100% of the total 52 million Bitcoin holder addresses are now in a profitable position.
Essentially, the majority of them may be reluctant to sell, leading to a bullish cycle of declining market supply amid rising institutional demand from MicroStrategy and BlackRock.
Without any resistance grouping above current prices, Bitcoin bulls now have their sights set on the next milestone price target at the $75,000 area.
But in the event of a bearish pullback, the bull could regroup and mount a formidable support wall at the $68,560 zone. The chart above shows that more than 6.6 million existing holders acquired 2.9 million BTC at the maximum price of $68,560.
With bullish winds from the recent market activity of key stakeholders such as BlackRock and MicroStrategy, most of them may choose to hold rather than sell.
That reduced selling pressure combined with the overwhelmingly positive media sentiment could trigger BTC price stage an immediate recovery from $68,000.
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While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
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