This must happen for Bitcoin to break above $58,000: Sentiment

In the past two weeks, bitcoin has seen a market correction of around 11% and even more pronounced volatile rises. Although the major crypto asset recently briefly recovered to $58,000, its price still has a long way to go before it regains its all-time highs.

On-chain data from blockchain market intelligence firm Santiment revealed that bitcoin wallets with less than 1 BTC are being aggressively accumulated.

Bitcoin reached as high as $58,000 today, and sentiment among retail traders is starting to look a little more positive. Wallets with <1 BTC now have their highest supply ratio in 7 months.

However, an ideal setup for crypto to regain all-time highs… pic.twitter.com/riPbS2W9qz

— Santiment (@santimentfeed) September 10, 2024

The chart above shows that these holders have increased their bitcoin supply distribution to 7.22%, the highest since February 7th. But the price of BTC will likely see a significant increase if this happens:

What could drive the price of BTC?

Santiment data showed that while wallets holding below 1 BTC are piling up more bitcoins, wallets holding between 1-100 BTC and those holding more than 100 have recently cooled. They saw their most recent peak distribution on July 27 and August 14, respectively.

The market intelligence firm explained that the price of bitcoin will move closer to its peak value of $73,700 if holders with 1-100 BTC grow steadily and those who own more than 100 BTC pile on the digital asset “aggressively”.

In particular, bitcoin and other related assets have seen more outflows than inflows in recent weeks. The United States spotted, for example, Bitcoin exchange-traded funds (ETFs), which saw non-stop outflows worth millions of dollars for nearly two weeks.

On the bright side, Japanese investment firm Metaplanet recently increased its bitcoin deposit by 38,464 BTC (worth $2 million). The acquisition brought his total to 398,832 BTC, valued at $26 million. While this large purchase benefited the company’s stock price, it did little to bolster bitcoin’s value.

Santiment’s theory implies that if larger buyers such as MicroStrategy and large Bitcoin ETF products get significant inflows of BTC, the value of the digital asset will see a meteoric rise, even if portfolios with less than 1 BTC remove portions of their holdings.

Bitcoin advocates remain bullish

Despite bitcoin’s current price action, advocates believe the asset will unlock significant long-term gains.

MicroStrategy co-founder Michael Saylor recently stated that BTC will rise to $13 billion in the next two decades.

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