Bitcoin’s spot market is showing signs of potential recovery as on-chain data, exchange flows, and technical signals suggest increasing buyer confidence. However, the cryptocurrency must break through the significant resistance level at $113,650 to ensure a bullish trend continues.
Growing Spot Demand for Bitcoin
- Demand for BTC is strengthening as dense accumulation indicates sustainable support.
- Exchange flows from Coinbase and Binance reveal liquidity movements that boost bullish momentum.
- Bitcoin must overcome the resistance at $113,650 to confirm a breakout or face a potential retest of $100,000.
The spot market for Bitcoin (BTC) appears to be on the brink of recovery, bolstered by significant on-chain data and favorable trading signals that point to escalating buyer sentiment. Analysts suggest that these recent developments could pave the way for an upward breakout, though caution is warranted due to the historically weak performance of the asset in September.
On-Chain Data Reflects Buyer Confidence
Data from Glassnode indicates that Bitcoin’s Cost Basis Distribution (CBD) differs considerably from that of Ethereum (ETH). The CBD, which tracks areas where substantial quantities have been accumulated or distributed, shows that Bitcoin’s spot activity is notably denser compared to ETH.
Transactions are clustering closely around recent price levels, signifying that buyers are accumulating with conviction. Historically, such dense clustering of Bitcoin has provided more durable support than futures-driven momentum, suggesting that the current market structure may be more resilient, with spot demand serving as a foundation for potential price increases.
Moreover, spending from long-term holders (LTH) has seen a slight uptick recently. The 14-day simple moving average (SMA) indicates a gradual increase, reflecting profit-taking activities. Nonetheless, this activity remains within the typical cycle norms and significantly below the peaks observed in October and November 2024, implying measured rather than aggressive selling.
Exchange Flows Indicate Liquidity Changes
Exchange flows further reinforce the narrative of a market recovery. A recent report from CryptoQuant highlighted that Coinbase experienced consistent net inflow spikes between August 25 and 31, following a period when its 30-day net flow SMA reached its lowest point since early 2023.
Historically, sharp reversals from multi-year lows often signal shifts in liquidity regimes, whether through settlement restructurings or increased readiness for heightened activity. Meanwhile, Binance’s 30-day net flow SMA has reached its highest levels since July 2024, peaking on July 25 and August 25. These levels often align with phases of reaccumulation leading up to new local highs.
The simultaneous low at Coinbase and the peak at Binance suggest a significant redistribution of reserves, potentially laying the groundwork for bullish momentum for BTC.
Technical Breakout Levels in Focus
Price movements also support the possibility of recovery. Bitcoin dipped to $107,300 on Monday, aligning closely with its short-term realized price before rebounding strongly. During Tuesday’s trading session in New York, BTC surpassed Monday’s high of $109,900, signaling renewed resilience.
On shorter time frames, such as the 15-minute and 1-hour charts, Bitcoin has recorded a bullish breakout of its structure. On the 4-hour chart, the Relative Strength Index (RSI) has risen above 50, reinforcing the increasing bullish momentum. For the recovery to gain traction, Bitcoin must decisively clear the resistance between $112,500 and $113,650.
A close above $113,650 would confirm a daily bullish breakout and invalidate the downward trend line that has constrained price action over the past two weeks. Such a move could open up liquidity targets at $116,300, $117,500, and potentially $119,500. However, if BTC fails to maintain momentum above $113,650, risks could tilt towards the downside, with a failed breakout potentially exposing the cryptocurrency to declines toward the order block between $105,000 and $100,000.
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