Bitcoin rises 10% despite bleak U.S. economic data – Is investor sentiment changing?

An important on-chain indicator of Bitcoin is signaling a positive reversal, as the realized cap of the long-term investor group (LTH Realized Cap) has surpassed 18 billion USD for the first time since September 2024. According to data from CryptoQuant, this group of investors – those holding BTC for 155 days or more – is showing signs of increasing accumulation, a behavior that has previously been associated with the bottoming phase of Bitcoin in the third quarter of last year.

The LTH Realized Cap index reflects the total cost that long-term investors have incurred to own Bitcoin. When this index rises sharply, it is a sign that long-term confidence is being reinforced, often accompanied by increased buying pressure and the prospect of price recovery.

The actual market cap of Bitcoin's LTH net position | Source: CryptoQuantHistory shows that each time this index breaks out, it paves the way for significant price increases of Bitcoin. Most recently, on September 8, 2024, LTH Realized Cap reached 18 billion USD – immediately after, BTC doubled in value within just a few months.

Another key factor supporting the argument that Bitcoin is forming a bottoming pattern similar to September 2024 is the sharp decline in open contracts (OI). In July, BTC's OI peaked at a record 39 billion USD, but it dropped 25% just within the following two months. A similar trend occurred recently when OI decreased by 28% from December 18 to April 8.

Open Bitcoin Contract | Source: CoinGlassIt is noteworthy that the strong upward trend of the LTH Realized Cap index coincided with a wave of liquidation of leveraged positions, further increasing the probability that Bitcoin has reached the bottom. However, in the past 24 hours, OI has rebounded nearly 10%, indicating that the upcoming price action could provide clearer signals about the market direction in the short term.

Bitcoin builds support at the level of $79,000

After hitting an annual low of $74,500 between April 7 and 9, the price of Bitcoin has surged nearly 10% in just the last three days. With the price still hovering around the $80,000 mark, data from Glassnode shows that BTC is establishing a solid support zone around the $79,000 level. In a post on platform X, this analytics company shared:

"Based on the (Cost Basis Distribution), Bitcoin has formed a strong support zone at the $79,000 level, with approximately 40,000 BTC accumulated here. Additionally, BTC has also surpassed the resistance zone around $82,080 – where nearly 51,000 BTC has been recorded."

Bitcoin Heatmap Based on Cost Basis Distribution | Source: X.comThe heatmap showing supply distribution from April 6 to 11 clearly reflects the accumulation behavior of investors, particularly after Bitcoin surpassed the $81,000 mark – a surge driven by US CPI inflation data at 2.4% and information that former President Trump has temporarily postponed tax enforcement for 90 days, thereby contributing to a cautiously optimistic market sentiment for a short-term recovery.

At the same time, the anonymous analyst Cold Blooded Shiller pointed out that Bitcoin is testing an important downtrend line, opening up the possibility of a breakout to the upside. He commented:

"It must be acknowledged that this is a very remarkable technical setup for BTC."

Daily BTC/USD Chart | Source: X/ Cold Blooded ShillerYou can view the Bitcoin price here.

Disclaimer: This article is for informational purposes only and is not investment advice. Investors should do their own research before making any decisions. We are not responsible for your investment decisions.

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