Bitcoin (BTC) Price: $40,000 Breakout Imminent as Market Supply Falls By $680M

Bitcoin Price Insights:

• Bitcoin (BTC) price reached a new 2023 peak of $38,400 on Friday, November 24. 
• Bitcoin Investors have shifted 18,000 BTC away from exchanges as Wall Street firms intensify their push for Spot Bitcoin ETF.
• Technical indicators highlight that BTC is still far from reaching overbought territory. 

Bitcoin (BTC) price reached a new 2023 price peak of $38,400 on Friday. On-chain indicators reveal the Wall Street giants making a renewed push for spot Bitcoin ETF approval were the major drivers behind the latest BTC price rally.  But can the bulls capitalize to reclaim $40,000? 

Investors Shifted BTC Worth $680 Million From Exchanges Within the Past Week

On Wednesday, November 20, the crypto market descended into a tailspin in response to the shock exit of Binance CEO Changpeng Zhao. However, BTC price has led the markets’ instant rebound, hitting yet another 2023 peak of $38,400 on Friday. 

The Bitcoin price rally was mainly attributed to Wall Street firms intensifying the push for Spot Bitcoin ETF approval. While Blackrock held meetings with the US SEC this week, surrounding its ongoing application process, Grayscale also launched a new Bitcoin Spot ETF prospectus. 

On-chain data reveals how investors’ reaction to these news events could trigger more gains in the coming days. Specifically, Cryptoquant’s Exchange Reserves data illustrates that BTC holders shifted over 18,000 BTC from exchanges and trading platforms this week. 

As seen below, the total BTC deposited on Exchanges stood at 2.044,551 at the start of the week on November 18. But at press time on Saturday, November 25, it has reduced to just 2,026,502. 

This shows that investors shifted a total of 18,049 BTC from exchange-hosted wallets, into long-term storage during the course of the week. When valued at the current price of $37,700 per coin, this means BTC market supply has reduced by $680 million in the past week. 

In concise terms, the Exchange Supply is an on-chain metric that depicts the total number of a cryptocurrency currently deposited across various exchanges and trading platforms. Ideally, a decline in exchange reserves means that fewer coins are readily available to be traded 

If demand for Bitcoin remains steady this $650 million reduction in market supply could be a precursor for BTC price to reclaim $40,000 next week. 

BTC Price Forecast: $40,000 Only a Matter of Time

Having reclaimed the $37,500 territory, the $680 million market supply outflows recorded in the past week could set BTC price up for another breakout in the days ahead.

In the daily time frame, Bollinger Band technical indicator also suggest that BTC price will likely enter a leg-up toward $40,000. 

As seen below,,BTC is currently trading below the upper band or simple moving average of $38,395.

This alignment suggests that BTC’s current price trend is still far from overbought territory. If the bulls capitalize on the positive market sentiment surrounding Blackrock and Grayscale’s recent moves around the Spot ETF approval, Bitcoin price could breakout. 

However the bull could face significant resistance around the upper bollinger band of $38,400. A decisive breakout above that range could see XRP price claim $40,000

On the downside, the bears could negate that bullish Bitcoin price forecast if they successfully force a downswing below $35,000. However, the support buy wall around the Parabolic Stop and Reverse (SAR) band at the $35,553 area will likely prove daunting.