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Is Bitcoin’s supply squeeze signaling the start of a new rally?
Bitcoin’s recent uptrend has left many wondering whether its momentum is about to be disrupted or sustained. To shed some light on this uncertainty, we will delve into an analysis that highlights the significance of spot market demand and its implications for the digital asset’s future trajectory.
The Bitcoin market has witnessed unprecedented growth over the past month, with prices reaching a new ATH of $108268. Many have been left scratching their heads as to what could be driving these prices up. Recently, CryptoQuant analysts have posited that this upward momentum is directly linked to growing spot market demand.
This surge in spot market demand has led many to speculate about the potential rally and its implications for Bitcoin’s future trajectory. One of the most crucial factors contributing to this demand is a reduction in supply. According to an analysis by Avocado on-chain, the king coin’s supply squeeze could be signaling the start of a new rally.
The data suggests that the market’s focus has shifted from the futures market to the spot market. While there may have been speculative excess in the futures market during the last bull run, it appears that this excess has cooled off in recent times. This cooling down of excessive speculation in the futures market could be a precursor to a potential rally.
One thing is clear: the current situation is a bullish signal. The data suggests that spot market demand has seen an unprecedented surge in recent times. In fact, users are withdrawing funds from exchanges and holding them in private wallets, which is typically indicative of long-term market confidence.
While Bitcoin has experienced a correction over the past day with prices falling 2.46%, there is no denying that this uptrend is still gaining momentum. A supply squeeze, coupled with rising demand, could mean that we are at the cusp of a new rally.
Source: ambcrypto.com
