4 reasons why Bitcoin remains bullish with BTC price above $98K
2025.02.06 08:51
Bitcoin has made several drops below $98,000 since early November 2024, but has been able to reclaim this level, often resulting in rallies to new all-time highs.
Bitcoin (BTC) is currently holding above $98,000, with several technical and onchain metrics pointing to a further upside for BTC in the short term.
BTC/USD daily chart. Source: Cointelegraph/TradingView
Less and less Bitcoin on exchanges
One factor supporting Bitcoin’s upside is the decreasing supply on exchanges. BTC balances on exchanges decreased by 13% over the last six months, from 3.1 million BTC on Aug. 9, 2024, to a six-year low of 2.67 million BTC on Feb. 5.
This drop accompanies a 62% rise in BTC’s price over the same period.
BTC reserve on exchanges. Source: Glassnode
When BTC investors move funds from centralized exchange (CEX) wallets to self-custody wallets, this indicates a lack of intention to sell in anticipation of a future price rise.
More than 17,000 BTC were withdrawn on Feb. 5, of which 15,000 BTC were withdrawn from the US-based exchange, Coinbase.
Bitcoin net transfer volume from and to exchanges. Source: Glassnode
This marks the biggest Bitcoin exchange withdrawal since April 2024, said the European head of research at Bitwise, André Dragosch, adding:
“Whales are buying this dip.”
Similar observations were made by market intelligence firm Santiment, which pointed out that whales are accumulating following Bitcoin’s latest price drawdown.
“This is an ideal setup for crypto market caps to rise, even if it takes a few more weeks (or even months) to see the generally bullish impact of coins being absorbed by whales.”
Source: Santiment
Weakening US dollar
The US Dollar Index (DXY), a metric that tracks the greenback’s performance against top world currencies, has dropped 1.7% from its Feb. 3 high of 109.51 to 107.673 following President Donald Trump’s tariffs threats against Canada and Mexico.
The subsequent pause on tariffs on Mexico and Canada brought some relief to the market, with the DXY recovering from a low of 106.91 on Feb. 5
DXY daily chart. Source: Cointelegraph/TradingView
A weakening dollar is “mega bullish for risk assets, including Bitcoin, said crypto influencer Lark Davis, adding:
“If $DXY continues to fall and with all bullish catalysts like the US SBR & nation-state Bitcoin FOMO, this could mark the next leg of the crypto bull market.”
Spot Bitcoin ETF inflows stay strong
BTC price has also been boosted by US-based spot Bitcoin ETFs, which have seen about $2.5 billion of inflows over the last two weeks.
In fact, these investment products have attracted $40 billion in capital since their market debut in the United States on Jan. 11, 2024.
Spot Bitcoin ETF flows table. Source: Farside Investors
The increase in institutional demand is encouraging since it was considered a key part of Bitcoin’s appeal last year, as BTC gained more than 133% in 2024.
Related: Bitcoin chart signals ‘decisive price move’ in coming weeks: Analyst
This is also reflected across all other Bitcoin products, with the latest Digital Asset Fund Flows Weekly Report by CoinShares pointing out that flows into BTC investment funds totaled $486 million in net flows during the week ending Jan. 31.
📈 US$527m inflows, but trade tariffs and #DeepSeek news influencing investors.
Digital asset investment products saw inflows totalling $527m last week. @Bitcoin’s #BTC saw inflows totalling US$486m while short-bitcoin saw a second week of inflows totalling US$3.7m.@Ripple’s… pic.twitter.com/Pp4sE09JJe
— CoinShares (@CoinSharesCo) February 3, 2025
Bitcoin’s bull flag points to more upside
Despite the BTC price drop earlier this week, a bull flag can be seen on the weekly chart, which hints at the continuation of the uptrend.
Bitcoin bulls are focused on flipping the flag’s upper boundary at $101,800 into support. A weekly candlestick close above this level would signal a bullish breakout from the chart formation, projecting a rally to $167,000. Such a move would represent a 70% ascent from the current price.
BTC/USD four-hour chart. Source: Cointelegraph/TradingView
The relative strength index’s position at 63 also suggests that the market conditions still favor the upside.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
