Bitcoin Surges 3% to $110,500 as Bullish Indicators Mount

Bitcoin's price surged past $107,000 on Monday, reaching $110,500 by Tuesday morning, marking a significant recovery from last week's turbulence triggered by the Trump-Musk fallout. This upward movement has been accompanied by several key on-chain indicators suggesting growing bullish sentiment and potential for further price increases.

One of the primary signals comes from Binance’s Taker Buy/Sell Ratio, which measures the volume of market buy orders relative to market sell orders. This metric has recently surged to 1.1, indicating that traders on Binance are showing significantly more buying aggression than selling. Historically, values above 1 tend to reflect a shift toward increased demand and bullish market behavior.

Another supportive indicator is the 90-day Buy/Sell Pressure Delta, which is climbing toward previous historical peaks of around 0.02. This delta represents the net accumulation behavior across the market. Although the current level is not yet excessive, it suggests sustained accumulation without signs of overheating, which could be conducive to gradual price expansion.

Bitcoin’s price has also broken above the UTXO (Unspent Transaction Output) 1-day to 1-week band. This band tracks coins moved within the last week, and its breakout indicates that newer coins are now in profit and are being held rather than sold off. Such breakouts have previously preceded transitions from distribution to re-accumulation phases, suggesting that a newer cohort of investors is entering the market with strong holding conviction.

Further validating this narrative is the rise in the Realized Cap held by long-term holders (LTH), which has now surpassed $56 billion. This suggests that coins are increasingly moving into wallets that have historically held assets for over 155 days, reflecting a general lack of intent to sell. These wallets tend to represent “smart money” that accumulates rather than exits during bullish phases.

Bitcoin’s recent rally can also be attributed to increased trading activity, positive on-chain signals, and favorable macro developments. Nearly $203 million in positions were liquidated in the Bitcoin market over the past day, with $195 million of those being shorts. This highlights the strength of the upward momentum and the repositioning of traders in the market. Derivatives volume more than doubled, rising 113% to $110.63 billion, and open interest grew by 7.3% to $76.6 billion, showing fresh capital entering the market.

A key external driver of this rally appears to be the easing tensions between the U.S. and China. Trade negotiations resumed, with hopes of a deal that could reduce tariffs and lighten export restrictions. This improved market sentiment, raising demand for riskier assets like Bitcoin. However, the real story lies in what’s happening on-chain. Bitcoin reserves on centralized exchanges have dropped from 1.55 million in July 2024 to just 1.01 million BTC today, a reduction of 550,000 coins in under a year. This steady withdrawal indicates long-term holding, as more Bitcoin leaves exchanges, shrinking the available supply. If demand rises at the same time, as it appears to be, prices typically move up. This pattern is consistent with the notion that Bitcoin is no longer viewed as a trading asset but as digital gold.

Further data indicates that U.S. investors’ demand is increasing. The “Coinbase Premium” indicator shows that Americans are paying more to purchase Bitcoin, a pattern frequently observed during the accumulation stages. Whale activity is also increasing, with renewed accumulation seen across wallet sizes, especially among those holding between 10 and 100 BTC. This suggests that larger investors are confident in Bitcoin’s long-term prospects.

Despite the optimism, there remains some caution. Bitcoin is still correlated to the larger equity market, which could limit short-term gains if macro headwinds reappear. Traders are still placing bets in both directions, and while liquidations heavily leaned against shorts, such volatility often indicates indecision. In these conditions, it only takes a modest reversal or macro shock to shake weak hands out of the market.

Even so, the mood is turning optimistic. Many analysts are already calling for new all-time highs in the coming days, some even eyeing $150,000 by the end of the year, especially if U.S. debt levels keep climbing. The recent rally also coincides with fresh accumulation from high-profile firms, confirming a recent purchase of 1,045 BTC between June 2 and June 6. This accumulation from institutional investors further supports the notion that Bitcoin is being viewed as a store of value, similar to digital gold.