Following the recent price upswing in the price of Bitcoin, several factors like crowd sentiment have been considered to be the major reason for the surge. However, Axel Adler Jr a market expert has delved into the subject, noting that the recent and previous price spike is majorly attributed to supply and demand.
Supply And Demand Dynamics Control Bitcoin’s Market
According to Santiment, a leading market intelligence platform, the positive sentiment around Bitcoin is witnessing a significant uptick reaching a new high point of the year, with investors and traders anticipating the digital asset to reach the $70,000 price level soon.
This increase in positive sentiment comes after BTC experienced an over 22% rise in the last 3 weeks. As a result, crypto enthusiasts and investors are currently watching the development closely to see how it will impact the price trajectory of BTC in the upcoming months.
However, Santiment has addressed this heightened anticipation, highlighting that for Bitcoin to reach a new all-time high in the coming months, the crypto asset might have to wait till the crowd’s expectation has cooled down. Furthermore, the intelligence platform noted that there are currently 1.8 postings about BTC that are positive and 1 that are negative, signaling strong optimism among investors and market participants. “Markets historically always move in the opposite direction of the crowd’s expectations,” the platform added.
While Santiment believes that Bitcoin’s next upward movement may rely on a reduction in crowd-positive sentiment, Axel Adler Jr, an on-chain and macro researcher argues that the development does not primarily impact BTC’s market.
Responding to the post, the researcher has asserted that the fundamentals of supply and demand majorly drive the price movement of BTC, rather than the positive mood generated by the masses. “The main factors that drive the market are always supply and demand,” he stated.
Although social media might act as a reflection of market participants, Adler claims it does not necessarily result in real actions in the market. Adler’s insights suggest that these dynamics will always influence the price pattern of BTC in the long term, in spite of short-term reactions of the market.
BTC Sees Growth In Supply Profit
In a recent research, analysts at on-chain data platform, CryptoQuant have reported that Bitcoin’s supply in profit has remained at high levels, which shows that a huge number of BTC holders are still in gains.
According to CryptoQuant, considering past cycles, the profit margin on BTC supply has mostly stayed above 80%. This persistent maintenance of supply profit is a significant indication of whether or not a bull cycle is in motion.
While there have been several scenarios where the profit has dipped below 80%, CryptoQuant noted that it has stayed above 80% for most cases in the ongoing bull cycle. Meanwhile, for those moments that it fell below the percentage, the platform has identified them as buying opportunities.
Featured image from Unsplash, chart from Tradingview.com
