Can bitcoin gain a foothold above $11,000?

Growth has slowed after testing highs for almost a year near $11,400. The inflow of assets to crypto exchanges indicates a possible continuation of the first cryptocurrency's rally.

Bitcoin broke the round $10,000 mark on Monday and climbed above $11,000 on Tuesday night thanks to a solid move. Over the past year, the first cryptocurrency has made several attempts to consolidate above the key $10,000 level, but has not succeeded.

Against the backdrop of the bitcoin rally, the number of open positions in futures on the regulated CME exchange reached a record high of $724 million. According to the analytical service skew, the jump in the index occurred amid a significant increase in trading volumes. The Bakkt platform also recorded a record in terms of trading volume for its bitcoin futures.

The strengthening of bitcoin has led to a surge in online interest in this cryptocurrency, according to data from Google Trends.

The current rally could be longer, CoinDesk analyst Omkar Godbowl said. However, we still cannot ignore the risks of a pullback given the recent activation of big players or so-called "whales".

CryptoQuant CEO Ki Young Ju said that "bitcoin whales" have been sending coins to exchanges over the past three days.

Deposits rose 68,970 BTC to 130,039 BTC on Monday, the largest single-day increase in the past 134 days, Chainalysis data showed.

Probably, some investors decided to take advantage of the multi-month price highs of the cryptocurrency to get out of their positions, perhaps doubting further growth prospects, writes ttrcoin. Usually, the result of such activity is a massive sell-off of the cryptocurrency and a drop in its value.

However, miners, according to Glassnode's observations, are in no hurry to sell bitcoins during the rally. At the same time, there is an inflow of assets from not only sellers, but also buyers. This can be traced back to deposits to USDT exchange wallets.

According to Chainalysis, the value increased by more than 440 million to 726 million on Monday. USDT is not the only instrument to buy bitcoin. Some investors may have used fiat, for example.

"The exchanges received demand of $726 million, acting as a counterweight to the $1.3 billion in bitcoins on the supply side," said Chainalysis lead economist Philip Gradwell.

Thus, the influx of buyer assets may be enough to absorb the additional supply created on exchanges as a result of the rate hike and help bitcoin consolidate above $10,000.

"Bitcoin broke out of the range in a sharp move. FOMO was launched in the market after bitcoin took important resistance levels and a sharp exit from the sidewall. On the other hand, the current positive sentiment may still not be able to withstand the pressure of large investors fixing profits," notes the FxPro team of analysts.