The selling pressure on Bitcoin has significantly decreased, hinting at a potential consolidation phase in April and May.
In a post on April 1, CryptoQuant analyst Axel Adler Jr. highlighted a sharp reduction in daily selling volume across major exchanges, from 81,000 Bitcoin (BTC) to 29,000 BTC. This drop may lead the market into a supply scarcity phase characterized by fewer sellers and steady demand, thereby paving the way for Bitcoin’s subsequent price movements.
Encouragingly, a similar trend is emerging in the futures trading market. In another post, Adler mentioned that short positions have increased as bearish traders sought to capitalize on Bitcoin’s record high in February. However, this bearish sentiment appears to be waning, indicating a shift in trading patterns.
Institutional investors are increasingly influencing Bitcoin’s price through exchange-traded funds, overshadowing the retail market’s impact. Consequently, Bitcoin is now more responsive to macroeconomic changes, such as adjustments in Federal Reserve policies and inflation figures.
Additionally, Binance’s strong presence in spot trading could reflect a favorable trend. Joao Wedson, another analyst from CryptoQuant, pointed out that Binance’s trading volume is currently eight times greater than that of Coinbase. Historical data shows that Bitcoin often sees price increases when Binance leads in trading volume.
However, not all signs indicate imminent gains. Growing inflation and newly imposed tariffs might impact risk assets like Bitcoin, according to an analysis from 10x Research dated March 31. With the inflation rate now at 5%, analysts from 10x Research suggest that expectations for inflation could hinder institutional investments.
They predict that Bitcoin may dip below $80,000 this week, especially in light of various risk factors that could pressure equities and extend their influence into the cryptocurrency sector.
As of the moment, Bitcoin is priced at $83,530, having fluctuated between $81,488 and $88,240 over the past week. Although there are rising short-term risks, the decrease in selling pressure signals a potential for market stabilization and sets the stage for upcoming price movements.