Bitcoin price at new all-time highs while on-chain metrics suggest further growth

Bitcoin shows no signs of a steep correction despite the massive gains it has posted since the beginning of the year. Now, a crucial resistance level is the only hurdle preventing BTC from advancing further. 

Bitcoin price primed for lift-off

Bitcoin price blasted through the $42,000 mark on February 8 after Tesla announced a $1.50 billion investment in BTC. 

The bullish impulse was fueled by speculation and FOMO among market participants, who rushed to exchanges to get a piece of this cryptocurrency. As buy orders piled up, Bitcoin price was recently able to make a new all-time high of $52,800.  

Although BTC has retraced since the peak, a breach of the $52,300 level could push its market value by 25%. In this case, Bitcoin price will rise to $65,500 or the 161.8% Fibonacci retracement level.

BTC/USD 1-week chart

Bitcoin price growth so far seems surreal. Even JP Morgan’s Global Market Strategist Nikolaos Panigirtzoglou suggested that BTC “looks unsustainable” at the current levels. Regardless, multiple on-chain indicators suggest that this is only the beginning of the bullish cycle.

Supply is being depleted from trading platforms

The total number of BTC tokens available on cryptocurrency exchanges is dropping fast. Since late February 2020, Bitcoin’s balance on trading platforms has plummeted by nearly 20%. It went from 3 million tokens to roughly 2.35 million. 

The steep decline in exchanges’ holdings shows that investors could be using Bitcoin as a store of value because they believe in its upside potential. Since the overall trend in the market seems to “HODL” Bitcoin instead of trading it, the selling pressure behind it is significantly dropping. 

A further decrease in Bitcoin’s balance on exchanges will inadvertently cap its downside potential, which is a very bullish sign for the bulls. 

Bitcoin Balance on Exchanges

While everything seems to be looking up for Bitcoin price, it is crucial to understand that unforeseen events could lead to a market crash. Therefore, rejection at the $52,300 resistance level could push BTC down to its previous all-time high of $42,000.