On-Chain And Technical Signals Suggest A Bitcoin Rally Is Brewing

Hopes for a bitcoin (BTC) revival are multiplying. Whether due to new institutional developments or technical signals, analysts believe in an imminent recovery of the cryptocurrency. After a period of stagnation, observers are turning to promising indicators and strategic adjustments made by major market players. While bitcoin appears undervalued, the future of the market looks more turbulent than ever.

Bitcoin: Momentum Supported by Institutions

Signs of a bitcoin recovery are abundant, and the increase in asset transfer volumes on regulated U.S. exchanges is a key factor in this momentum. The “US vs. offshore ratio” indicator shows that U.S.-based exchange platforms are gradually regaining influence over transfer volumes, driven by growing interest from the U.S. market.

This shift suggests a trend reversal after a period dominated by offshore exchanges, when bitcoin hit its all-time high earlier this year.

Axel Adler Jr., a bitcoin researcher, highlighted this reversal, stating that transfer volumes on U.S. platforms are rising again, reminiscent of past bull market phases. According to Adler, this phenomenon could precede a strong rise in the bitcoin price, a positive signal for those watching for a rebound.

Meanwhile, analysts like Boris Vest emphasize that bitcoin remains undervalued, despite a continuous decrease in reserves held on exchange platforms. With only 2.43 million BTC circulating on these platforms, down from 3.4 million in 2021, supply tension is expected to intensify.

This situation, combined with a relatively low stablecoin supply ratio (SSR), indicates persistent buying pressure.

Bitcoin still appears undervalued, suggesting that bullish pressure and the bull market will continue.

These elements point to an increasing probability of price gains.

The Importance of Technical Indicators and the Role of VWAP

Analysts are also turning to technical indicators such as the Volume-Weighted Average Price (VWAP), which play a central role in assessing the current market momentum. Dom, a market analyst, observed that bitcoin crossed a crucial step by returning above the VWAP for the first time since January.

This movement is especially important because the VWAP is a key indicator for determining market direction based on price changes weighted by transaction volume. Dom explains:

Bulls have managed to hold this level for four days, a sign that selling pressure is retreating.

If the price surpasses yesterday’s levels, there could be a strong move towards $90,000, marking a major turning point for the flagship crypto.

These technical signals show that fundamentals support a recovery, similar to previous bull rallies. However, some analysts, like João Wedson from Alphractal, remain cautious, recommending to wait for a pullback to avoid the situation becoming a trap for bulls.

The risk lies in the resistance around $86,000, a zone that could slow further bitcoin gains and cause a new consolidation phase. Still, this caution only highlights the growing tension in the market and investors’ desire to secure higher price levels.

Despite remaining market uncertainties, recent trends and signals from indicators like the VWAP strengthen the bullish outlook for bitcoin. The return of bulls to regulated U.S. exchange platforms and strong buying pressure indicate potential growth toward $90,000. Binance, meanwhile, recently displayed a key technical signal that could mark a turning point for BTC. This could be the start of a strong comeback for the flagship cryptocurrency, though it remains to be seen if the current resistances will hold.