Bitcoin Surges 47% Since April, Nears All-Time High

Bitcoin has been exhibiting strong signs of a potential rally, with several key on-chain metrics and market indicators suggesting that the cryptocurrency could be on the verge of reaching a new all-time high. The on-chain data indicates a reluctance to sell from miners and long-term holders, which is a positive sign for the market. This reluctance, coupled with evidence of increased buying power, supports the notion of a BTC rally.

Bitcoin has been struggling to sustainably exceed $110,000, despite shared technical signals and a tense market. However, the asset has finally breached the $110,000 mark, inching closer to its all-time high. The cryptocurrency has risen 47% since its April lows and is trading just under 2% away from its all-time high at $112,000. This significant increase suggests that Bitcoin is on the verge of a major breakout.

The Bitcoin market now appears to be seeing a notable surge in its momentum. The asset has climbed back toward the $110,000 mark, but Open Interest data could raise questions about the sustainability of the rally. Despite this, the broader market trends and a weaker dollar are fueling a strong rally, suggesting that Bitcoin could reach new all-time highs.

Bitcoin is currently trading above $108,000, having increased by approximately 3% in the last 24 hours, and is close to its all-time high of nearly $110,000. The leading digital currency has seen a 98% increase in the number of profitable holders. According to IntoTheBlock data, 98.9% of Bitcoin holders are currently "In The Money," suggesting a potential bullish rally. This percentage represents 9.69 million BTC valued at $2.17 trillion. With this massive amount of Bitcoin purchased at a price below the current market value, there is likely no sell pressure on investors, as they are already in profit. This signals bullish sentiment on the Bitcoin market.

The remaining 1.1%, or 218,530 BTC, is worth $4.11 billion "at the money." That is, they are not at a loss and purchased close to the current price of the asset. Interestingly, there are currently no Bitcoin holders out of the money. This paints a strong bullish market for the flagship cryptocurrency.

All the metrics indicate a significant potential rally. The high percentage "In the Money" reflects strong market confidence. It suggests that traders are positioned for price stability and a possible increase if BTC consolidates between $108,500 and $110,500. Such a setup could see the coin break out above $112,000 if trading volume remains high up in the green zone. With market sentiment aligning, Bitcoin might well be on its way to setting a new ATH near the $120,000 price level. The road to $120,000, however, depends on Bitcoin's ability to overcome volatility. If it fails to break resistance at $112,000, this could trigger a correction and a slip to $105,000.

An increase in market buying power, combined with signs of seller exhaustion, could be setting the stage for Bitcoin’s next rally. According to crypto analyst Axel Adler Jr., the Difference Liquidity metric, which tracks changes in available buying power based on Bitcoin and stablecoin inflows to exchanges, has turned negative on its 30-day Moving Average. This places it in the chart’s “demand generation” zone, highlighted in blue, which historically signals strong and sustained Bitcoin accumulation. The last time this level of demand shift occurred was during the market recovery following the Terra/LUNA collapse in May 2022. If stablecoin inflows to exchanges now match or exceed those seen after the LUNA crash or the FTX implosion in November 2022, Bitcoin could be poised for a sharp upward move.

The Bitcoin Exchange Flow Multiple compares the past 30 days of BTC inflows to their 365-day moving average. Over the last two weeks, this metric has dropped from 1.0x to 0.6x—a 40% decline, indicating a significant reduction in the number of coins being sent to exchanges. The last time such a sustained drop occurred was in April 2023. Historically, low exchange flow multiples like this have often preceded strong price rallies, suggesting a potentially bullish outlook for Bitcoin.

Lowered BTC inflows to exchanges over the past month hinted that sellers were exhausted. Miner outflows were below average, which has historically signaled miners’ confidence in a price appreciation. The Coin Days Destroyed metric noted no panic amongst long-term holders, another sign of confidence amongst seasoned holders. On the other hand, aggressive buying was cooling off, as the falling Taker Buy/Sell Ratio reflected. The rising spot BTC ETF inflows, combined with the conviction highlighted earlier, might be enough to drive a sharp impulse move and a new all-time high for Bitcoin. Other metrics supported the bullish argument for Bitcoin.