Key Insights:
- Bitcoin price holds steady above $70,000 as geopolitical tensions cool off.
- Bitcoin netflows reveal that roughly $55 million worth of Bitcoin has been exiting exchanges daily.
- Exchange reserves are still down to multi-year lows.
Bitcoin (BTC) price is currently holding its position above $70,000 despite a noteworthy retreat this past week. A deeper dive into its supply-demand dynamics suggests a high likelihood that it could stick its neck above the same price level for the next 4 weeks.
Geopolitical factors have been weighing heavily on Bitcoin (BTC) price action over the last few weeks. Market sentiment has consequently been subdued, as the risk-off scenario favored assets such as oil and gold.
Concerns over disruptions caused by the Strait of Hormuz blockage were at the center of deteriorating sentiment. However, recent reports revealed that the US has temporarily waived sanctions on Iran.
This marked the first move pointing towards the US softening its stance on Iran since the conflict began. Moreover, it underscores the rising concerns over the impact of the Strait of Hormuz’s closure on the global economy due to rising energy prices.
Declining Gold Price Supports Bitcoin Price Upside Potential
The temporary sanctions lift may boost access to oil and ease energy concerns. Meanwhile, gold, which has been the go-to safe-haven asset for investors, was down by over 17% in the last 3 weeks, and it bled faster in the last 7 days.
Outflows from gold may signal the return of investor optimism. It may also highlight a positive sentiment shift in favor of risk-on assets such as Bitcoin (BTC) price.
These factors may partly explain why the BTC price demonstrated resilience above $70,000. Bitcoin holders have not been selling as much as they did in January and February.
In fact, BTC price above $70,000 was supported by healthy outflows from exchanges. According to CryptoQuant, Bitcoin exchange reserves hovered at 2.74 million coins at the time of observation.
Bitcoin exchange reserves were still at multi-year lows despite the slight retracement this week. This confirmed that demand was still present, with buyers moving coins to private wallets.
A trend usually observed when holders shift to a long-term holding strategy, especially after months of heavy discounts.
Analysis Claims That Over $55M in Bitcoin Outflow from Binance
While the exchange outflows have been propping up the BTC price above $70,000, on-chain data revealed quite an interesting development.
According to CryptoQuant analyst Burakkesmeci, at least $55 million worth of liquidity was injected into Bitcoin on Binance during its price recovery from $65,000 to $74,000.
While this accumulation has helped keep the Bitcoin floor price a little higher in the last 2 weeks, demand was not sustained. However, it was also worth noting that sell pressure was also not as strong, considering that the bears were previously in control for months.
Whether the Bitcoin price will prevail above $70,000 will largely depend on macro factors. So far, the situation suggests that liquidity flowing out of gold may signal that risk-on assets might benefit. However, that remains to be seen.
Meanwhile. Prediction markets have shifted their Bitcoin price predictions slightly. For example, Polymarket currently predicts a 73% chance that the BTC price will rally to $80,000.
Some analysts believe that recent Bitcoin price upside momentum could indicate that smart money was positioning for April. This coincides with the same timeline during which Iran sanctions will be lifted temporarily.
Perhaps this could set the perfect conditions for BTC to extend its recovery. However, further escalation remained a challenge, especially with President Trump threatening to take further action against Iran if they fail to reopen the Strait of Hormuz.