Key Insights:
- Ancient Bitcoin supply rate outpaced daily issuance, squeezing liquid market supply.
- Over 350,000 BTC exited exchanges since Oct. 2024, deepening the supply crunch.
- Analysts flagged a bullish pennant breakout and RSI structure resembling prior bull peaks.
Bitcoin (BTC) price market is showing signs of an imminent breakout as key metrics indicate a significant shift in supply dynamics. The current development of the ancient Bitcoin supply rate is growing faster than the daily supply, causing the market supply to decrease, which could lead to upward price pressure.
Supply Dynamics Point to Potential Breakout
The flow of supply of Bitcoin has changed considerably in recent months. As is indicated in the chart, old Bitcoin supply (Bitcoin maintained 10 years or longer) is currently growing faster than new coins are issuing daily.
The increasing ancient supply restricts the supply of Bitcoin for trading. With long-term holders still holding more bitcoin, there is a reduction in the supply of new coins, which typically leads to increased scarcity in the market.
Bitcoin Withdrawals from Exchanges Support Bullish Trend
The supply of bitcoin on exchanges has been declining too. Over 350k BTC worth roughly 35 billion have been removed by owners of BTC on exchanges since October 2024. This outflow has decreased the supply of Bitcoin in circulation, increasing yet again the supply squeeze.
The outflow of BTCis generally bullish because it implies that its owners are transferring their holdings to cold wallets, which they can hold onto. The action displays that investors are ready to cash in on the rise of the Bitcoin price and not to sell in the medium term.
Bitcoin Forms Bull Pennant: A Breakout on the Horizon
Market analyst MerlijnTrader stated that BTC is presently in a bullish reversal bull pennant, which indicates further price increases. This pattern is characterized by a strong upward movement, followed by a period of tight consolidation within a narrowing range.
The consolidation forms pressure, and as the range becomes narrow, it is an indication that a breakout is about to occur.
Bitcoin has recently tested a key resistance level around $106,000. In case BTC gets beyond this resistance, analysts foresee that the asset will surge. The constrained accumulation and build-up are evidence that when the breakout does eventually come, it may come very fast and gather further momentum.
RSI and Historical Cycle Analysis Point to Bullish Momentum
Furthermore, Bitcoin’s monthly RSI (Relative Strength Index) is currently approaching a level that has historically signaled the top of the market. According to market analyst EtherWizz_, every time Bitcoin’s RSI has touched this level in past cycles, it has led to significant price movements and a top formation.
The current market structure mirrors these past cycles, suggesting that Bitcoin is approaching a potential price surge, with one last leg up before the top formation.
Moreover, Bitcoin’s price cycles typically span 1065 days from bottom to top. The chart indicates that BTCis using the same format as the past cycles, and analysts are suggesting that the peak has not been reached yet. This implies that the market still has one leg up to go before reaching the peak, and Bitcoin investors are likely to make a lot of gains in the next few months.
Bitcoin Price Forecast: $110K by Mid-July?
According to the latest Bitcoin price forecast, BTC could rise by 5.79% to hit $110,288 by July 18, 2025. The Fear & Greed Index currently sits at neutral, while recent market action showed 18 green days out of 30 and volatility of 1.88%.
With reserve supply tightening, long-term holders accumulating, and bullish technical patterns forming, Bitcoin’s structure appears primed for upward continuation. However, the absence of retail participation could limit explosive upside unless broader demand returns.
Disclaimer
This article is for informational purposes only and provides no financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.
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