Bitcoin Surges 24% In A Month, Nears All-Time High As Exchange Reserves Decline

Bitcoin is currently trading around $103,000-$104,000, nearing its all-time high. This surge marks a 24% increase over the past month and a 10.4% gain in the last week. The cryptocurrency is now approximately 4% below its January peak, indicating a renewed bullish momentum in the market.

The Fear & Greed Index stands at 70, reflecting strong investor greed. However, it has not yet reached the extreme greed territory (above 75). This suggests that while investors are optimistic, there is still room for further price appreciation without the risk of a sudden market correction.

On May 12, over 3,000 BTC, valued at approximately $312 million, was withdrawn from a major exchange. This significant outflow is part of a broader trend of declining exchange reserves, which have dropped from about 595,000 BTC in late February to 541,400 BTC by mid-May. Such outflows typically indicate a preference for cold storage or private wallets, suggesting lower selling pressure and potential accumulation strategies among investors.

The timing of these withdrawals coincides with positive developments in global markets, particularly the new trade agreement between the United States and China. This geopolitical breakthrough has boosted investor confidence across both traditional and cryptocurrency markets, contributing to the recent price surge in Bitcoin.

Bitcoin briefly crossed the $105,000 level before experiencing a small pullback to around $103,000. Despite this minor correction, the overall trend remains positive. Earlier in the month, trader sentiment declined to a neutral level as the price surge temporarily paused. However, with the recent continuation of the rally, market mood has improved once again.

The current reading of 70 on the Fear & Greed Index suggests that investors are optimistic but not excessively so. This balanced sentiment is often considered healthier for sustainable price growth compared to periods of extreme market euphoria. The metric determines market sentiment by analyzing trading volume, volatility, market cap dominance, social media sentiment, and Google Trends data.

Market analysts suggest that capital is shifting across asset classes in response to broader economic developments, with Bitcoin benefiting from renewed risk appetite and improving global trade dynamics. As traditional markets recover and geopolitical risks ease, Bitcoin’s reduced exchange reserves and growing off-exchange holdings may provide the foundation for another test of its all-time high in the near future.

The ongoing reduction in exchange balances coupled with price appreciation points to a market that may be entering another phase of accumulation before potentially challenging previous records. Recent patterns indicate that long-term holders and institutional participants are gaining confidence in Bitcoin’s role within diversified investment strategies, potentially setting the stage for further price discovery in the coming weeks.