Bitcoin spot market signals potential recovery rally

• BTC spot demand strengthens as dense accumulation signals durable support.
• Coinbase and Binance flows hint at liquidity shifts fueling upside momentum.
• Bitcoin must clear $113,650 resistance to confirm breakout or risk $100K retest.

Bitcoin’s (BTC) spot market is showing signs of a potential recovery, supported by on-chain data, exchange flows, and technical signals that point to strengthening buyer conviction.

Analysts suggest the latest developments could set the stage for a bullish breakout, though caution remains given September’s historically weak seasonality for the asset.

On-chain data highlights buyer conviction

Data from Glassnode reveals that Bitcoin’s Cost Basis Distribution (CBD) is diverging sharply from Ether (ETH).

The CBD, which tracks where significant amounts of supply have been accumulated or distributed, shows Bitcoin spot activity as notably denser compared to ETH.

Transactions are clustering tightly around recent price levels, an indication that buyers are accumulating with conviction.

Historically, such dense clustering in Bitcoin has provided more durable support than futures-driven momentum.

This suggests that the current market structure may be more resilient, with spot demand forming a foundation for potential upside.

Complementing this trend, long-term holder (LTH) spending has accelerated modestly in recent weeks.

The 14-day simple moving average (SMA) shows a gradual rise, pointing to some profit-taking.

However, activity remains within cycle norms and far below the peaks seen in October and November 2024, implying that the selling is measured rather than aggressive.

Exchange flows indicate liquidity shifts

Exchange flows are also reinforcing the recovery narrative.

A CryptoQuant quicktake highlighted that Coinbase recorded consistent net inflow spikes between August 25 and 31, following a period when its 30-day SMA netflow hit the lowest level since early 2023.

Historically, sharp reversals from multi-year troughs often signal liquidity regime shifts, either from settlement restructuring or increased preparations for higher activity.

At the same time, Binance saw its 30-day SMA netflow rise to its highest levels since July 2024, peaking on July 25 and August 25.

These levels have previously aligned with reaccumulation phases that precede new local highs.

The simultaneous trough at Coinbase and peak at Binance suggest meaningful reserve redistribution, potentially laying the groundwork for upward momentum in BTC.

Technical breakout levels in focus

Price action further supports the possibility of a recovery.

Bitcoin dipped to $107,300 on Monday, aligning closely with its short-term realized price, before rebounding sharply.

By Tuesday’s New York trading session, BTC had broken above Monday’s $109,900 high, signaling renewed resilience.

On shorter timeframes, such as the 15-minute and 1-hour charts, Bitcoin has registered a bullish break of structure.

On the 4-hour chart, the relative strength index (RSI) has climbed back above 50, reinforcing growing bullish momentum.

For the recovery to hold, Bitcoin must decisively clear resistance between $112,500 and $113,650.

A close above $113,650 would confirm a bullish daily breakout and invalidate the descending trendline that has capped price action for the past two weeks.

Such a move could unlock liquidity targets at $116,300, $117,500, and potentially $119,500.

However, if BTC fails to sustain momentum above $113,650, risks remain skewed to the downside.

A failed breakout could expose the cryptocurrency to declines toward the order block between $105,000 and $100,000.