Bitcoin‘s US Dominance Resurgence Hints at $90K Run, But Analysts Issue Cautions
Bitcoin‘s US Exchange Dominance Signals Potential Bull Market Rally
The cryptocurrency market is abuzz with renewed optimism as a key indicator suggests a potential Bitcoin (BTC) price surge in the near future. Bitcoin researcher Axel Adler Jr has highlighted a trend reversal in the “US vs. offshore ratio,” which measures the volume of BTC transfers between US-regulated and offshore exchanges. This ratio shows that US exchanges are regaining their dominance over Bitcoin‘s token transfer volumes, a pattern reminiscent of previous bull market rallies.
The chart showcasing this trend reveals a crucial technical indicator: the 90-day simple moving average (SMA) crossing above the 365-day SMA. This crossover has historically preceded significant price rallies. When this signal occurred at $60,000, Bitcoin embarked on a rally within a week. This historical precedent adds weight to the possibility of a similar price surge in the coming weeks.
Bitcoin‘s Undervalued Status Fuels Bullish Sentiment
Adding to the optimistic sentiment, onchain analyst Boris Vest has emphasized that Bitcoin is still undervalued. He cites declining Bitcoin exchange reserves, which have fallen to 2018 levels, with only 2.43 million BTC held on exchanges compared to 3.4 million in 2021. This indicates long-term holding and a reduction in supply, bolstering the argument for a bullish outlook. The Bitcoin stablecoin supply ratio (SSR) at 14.3 reinforces this view, highlighting significant purchasing power remaining, as the ratio is below 2021 levels.
“Since it hasn’t yet reached 2021 levels, we can say that Bitcoin still appears to be undervalued. This suggests the bull market and buying pressure are likely to continue.” – Boris Vest
Key Indicators Point Towards a Potential $90,000 Run
Markets analyst Dom has observed that Bitcoin‘s recent multi-month downtrend breakout coincides with BTC flipping the monthly VWAP (Volume-Weighted Average Price) into support for the first time since January. VWAP is a technical indicator that helps assess trend shifts, identify support or resistance, and gauge whether an asset is overbought or oversold.
Dom explains that Bitcoin‘s successful holding of these levels for four days, a feat not seen in months, suggests a positive trend. “A move above yesterday’s high and I think BTC runs near 90k.” This aligns with the broader bullish sentiment stemming from the resurgence of US exchange dominance and Bitcoin‘s undervalued status.
Cautious Approach Amidst Potential Bull Traps
While the indicators point towards a bullish outlook, not all analysts share the same degree of optimism. Alphractal founder João Wedson advises caution, particularly near the $86,000 mark. He believes a pullback might be in order if Bitcoin breaks above this level, as bearish control could still prevail.
Alphractal’s analysis identifies $86,300 as a key resistance zone, warning of the potential for a “bull trap” – a situation where a false breakout lures investors into buying, only for the price to subsequently decline. This underscores the need for a balanced approach, with careful consideration of potential risks alongside the bullish signals.
In conclusion, while the recent trends suggest a potential price surge for Bitcoin, it is crucial to remain cautious and evaluate the market with a critical eye. The interplay of various indicators, including the resurgence of US exchange dominance, undervalued Bitcoin, and potential bull traps, highlights the dynamic nature of the cryptocurrency market and the importance of conducting thorough research before making any investment decisions.
