- New buyers are aggressively buying BTC, reflecting growing interest.
- Although new buyers are increasingly buying, momentum buyers lack conviction with the market.
Over the past week, Bitcoin [BTC] prices have surged from $93k to reach $105k. The price surge to $100k has left analysts talking over what’s driving the surge.
According to Glassnode, the major driving force towards Bitcoin’s recovery past $100k is the rising demand among new entrants.
Source: Glassnode
As per Glassnode, supply mapping indicated sustained strength in new demand. Thus, Bitcoin’s first-time Buyers’ RSI has held at 100 all week.
With this metric holding around 100, it suggests that new investors are consistently entering the market.
In fact, over the past 20 days, $6 billion in cash has been injected into the market through newly issued USDT. Therefore, Bitcoin is seeing growing participation from first-time buyers.
Such market behavior usually emerges during a healthy bull phase, when interest in Bitcoin steadily grows.
Source: Checkonchain
Over the past 30 days, capital rotation position change has risen from $6 billion to $26 billion as of this writing.
Such a massive hike in capital reflects growing demand for Bitcoin as investors, whales, retailers, and institutions’ appetite for BTC rises.
Source: CryptoQuant
This growing demand for Bitcoin is further confirmed by the amount of Bitcoin leaving exchanges. Over the past day, Bitcoin exchange netflow has declined to a weekly low of 1.6k BTC.
This suggests that Bitcoin is seeing more buyers than sellers.
Such a trend where new buyers for BTC are dominating the market emerge during strong price rallies and may signal continuation of a bull market.
Can these buyers deliver BTC’s new high?
The recent surge in new buyers reflects growing attractiveness for Bitcoin among outsiders. Thus, whales, institutions, and retailers who have not been involved with Bitcoin are now seeing BTC as a viable investment tool.
Often, for sustained growth, Bitcoin needs new users as it signals growing adoption rate. Currently, the only issue for a sustained price rally is a difference in sentiment among new and momentum buyers.
Although new buyers are aggressively entering the market, momentum buyers are not fully convinced. Therefore, Bitcoin’s Momentum Buyers remain weak, with the RSI holding at 11.
An RSI at 11 signals low conviction and participation from short-term speculators.
Historically, momentum buyers are key for a sustained rally.
Without momentum buyers in the market to push prices higher, rallies struggle to accelerate, with prices stalling or retracing if only new buyers are the only ones actively supporting the market.
A continuation of these trends could see BTC remain stuck between $100k and $105k. However, if sentiment among momentum buyers change, the king coin can breach $100k resistance and make a new high.