3 Reasons Why Bitcoin (BTC) Can Go Up in the Short Term

At the same time, one important indicator suggests that the price may drop significantly in the foreseeable future.

The leading cryptocurrency has had a significant rise in the past few days, and its price briefly rose to $76,000.

Although it was stopped there and pushed south of $5,000, other key factors, including recent whale activity, suggest that it may post more gains in the near future.

BTC Not Done Yet?

Despite losing steam in the past hours, Bitcoin remains in the green on the weekly scale and is currently trading around $71,400 (per CoinGecko data). As a result, many analysts have turned to the optimists’ corner and expect further price increases.

Popular market watcher Ali Martinez, for example, said that a daily close above the $73,344 resistance and later turning that level into a structural floor would open the door to the pump at $79,234 and $85,555.

In a subsequent post on X, the same analyst revealed that whales had received 40,000 BTC in the past seven days. The USD equivalent of the stash is about 2.9 billion (at current rates), and now this group of investors controls about 5.17 million units, or about 25% of the stock in circulation.

Such accumulation is generally considered bullish because it reduces the amount of BTC available on the open market, which, combined with the potential decrease in demand, should lead to an increase in price. They may also empower smaller players to step in and support the upward momentum.

Next on the list is strong interest in BTC ETFs lately. Over the past seven days, inflows into those investment vehicles have outpaced outflows, the longest streak since last October. When institutional investors such as pensions and hedge funds increase their exposure to assets through regulated financial vehicles, they require issuers to purchase BTC to redeem their shares. Simply put, consistent ETF demand causes the remaining supply to shrink, which tends to push the price north.

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Despite the renewed interest in such financial vehicles, many ETF investors remain underwater. Earlier this week, Axel Adler Jr. estimated that the level of $79,962 represents the basis of the standard cost of each BTC currently held within these exchange-traded funds. If the asset trades below this mark, the group is sitting on an unrealized loss, while breaking above will lead to a paper profit.

Finally, we will touch on the dwindling supply of BTC held in crypto exchanges. Today (March 18), the number dropped to a new six-year low of nearly 2.72 million units. This suggests that investors continue to abandon medium-sized platforms in favor of self-sustaining methods, thus reducing the pressure to sell quickly.

The Next Big Change?

Another industry participant who analyzed BTC’s recent performance is Cantonese Cat X user. They say the Bollinger Bands on the monthly scale have reached unprecedented levels.

A technical indicator shows how far the price moves from its average, helping traders measure volatility. If the bands are tight, it indicates a long period with little turbulence: a setup that usually precedes a big bang. It is important to note that the big movement can be in any direction, or, as the Cantonese Cat said:

“This is going to lead to stronger moves if it expands. All that volatility you’ve seen in the past few months is nothing compared to what’s to come.”