Bitcoin (BTC) has made significant gains this week, trading at $67,409 at press time, its highest level since August. These gains have seen Bitcoin’s market dominance skyrocket to 58%, the highest level in three years, as altcoins struggle to keep up with the gains.
Following this rally, the Bitcoin Fear and Greed Index has surged to 73, indicating that the market is in a state of greed. This index usually rises when the market sentiment is bullish, indicating that traders are buying into the rally as they anticipate further gains.
Bitcoin is now only 8% below its all-time highs, but several indicators are aligning suggesting that a record high could be around the corner.
Whales & Retail Traders Accumulate BTC
Large Bitcoin addresses have been accumulating Bitcoin at a high rate, according to a report by CryptoQuant. In the past week, the 30-day holdings for institutions increased by over 67,000, with these wallets now holding more than 3.9M coins;
According to the report, this accumulation coincided with buying activity across cryptocurrency exchanges. Moreover, if these large addresses continue to stockpile, the buying pressure could counteract buying activity by retail traders, resulting in a positive market sentiment.
On the other hand, retail traders, who usually leave the market during sideways price movements, are making a comeback. The 30-day change in retail investor demand has significantly increased and is approaching the high-demand zone.
During past cycles, whenever Bitcoin reached this high-demand zone, prices reached an all-time high shortly after. BTC will likely record a significant gain towards the next record high if these past trends continue.
Crowd Sentiment is Bullish
In another report, blockchain intelligence platform Santiment noted that the crowd sentiment is bullish, paving the way toward a $70K rally soon. However, going by past trends, Bitcoin’s rally tends to halt whenever the market sentiment is overly bullish.
Santiment noted that market chatter of a rally toward between $70,000 and $79,000 had peaked. At the same time, the negative sentiment had subsided, with traders being less convinced that the price could drop below $59,000.
Nevertheless, several bullish narratives are still in play that could extend Bitcoin gains. The US Presidential election, which has had a notable impact on the crypto industry, is less than two weeks away, and the event is set to spur market volatility.