Bitcoin pushed above $78,000, lifting the broader crypto market. The move came as risk sentiment improved after US President Donald Trump extended the ceasefire with Iran. Stock index futures also rose.
The cryptocurrency’s ascent ended the weeks of choppy trading between $65,000 and $75,000 that defined March and early April, and finally gave momentum traders the green signal they had been waiting for.
Momentum traders buy when they see evidence that an uptrend is coming. Bitcoin’s breakout is exactly that, and more buyers could pile in as a result, adding momentum. As the First Law of Motion states: An object in motion remains 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 spent months on the 65 to 75 box. Breaking out of that kind of range matters because it changes behavior. Sellers who were comfortable fading rallies above 74 now need to reassess. Momentum buyers who were waiting for confirmation finally have something to lean on,” analysts at Marex said.
Onchain indicators suggest the same. For example, the number of coins held in wallets linked to centralized exchanges has fallen to a fresh multi-year low of 2.67 million BTC, according to data source CryptoQuant. This points to continued investor accumulation, which may culminate in a supply shock.
“Bitcoin supply on exchanges continues to shrink, with fewer coins available for sale, more BTC moving to long-term holders, and liquidity tightening. Bitcoin is becoming increasingly scarce – supply decline means volatility rises,” said Delta Exchange on X.
Still, QCP Capital urges caution, noting the continued relative wealth of bitcoin put options on Deribit. Puts are used as a hedge against potential price falls on the underlying asset. It added that crypto trends currently seem to be tied to the oil price and interest rate outlook.
“The way forward remains anchored to oil and politics. A move lower in crude or clearer Fed signaling would support risk. Absent that, markets are likely to remain in a holding pattern, pricing uncertainty over resolution,” the Singapore-based firm said in a market update.
In traditional markets, WTI crude futures are trading around $90, having bounced from a low of $78 on Friday.
In the broader market, DeFi security risks remain a concern as hacks proliferate. Early today, the Sui-based Volo protocol was drained of over $3 million just days after the KelpDAO event caused collateral damage across the sector. Pay attention!
Read more: For analysis of today’s activity in altcoins and derivatives, see Crypto Markets Today. For a comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead.”
What is trending
This is an excerpt from CoinDesk’s ‘Diary’ newsletter. Sign up here if you haven’t already.
Today’s signal
The chart shows bitcoin’s daily price movements in candlestick format, with lines indicating the 100-day and 200-day average prices.
BTC’s price has established a solid foothold above the 100-day moving average, represented by the white line. This is crucial because the 100-day average capped the rejection in January, after which sellers re-established control, leading to a deeper break to nearly $60,000.
Now that the price has penetrated, which typically signals a strengthening of bullish momentum, the focus shifts to the 200-day average, which is currently located at $85,900.
