Bitcoin Accumulation Amid Geopolitical Tensions

Key Insights

• Bitcoin whales are accumulating on Bybit during the Israel-Iran conflict, reminiscent of past price rallies.
• Exchange depositing addresses have reached a 10-year low, indicating increased long-term investor confidence.
• A bull flag pattern on Bitcoin's daily chart suggests a potential price target of $117,700.

Market Dynamics

As the Israel-Iran conflict unfolds, Bitcoin whales are taking advantage of the situation by building long positions on Bybit. This trend has led to a decrease in retail sentiment and trading volumes, which historically has preceded significant price increases for Bitcoin.

Historical Context

The Taker Buy/Sell Ratio on Bybit, which measures aggressive buy orders against sell orders, has seen a notable increase. A ratio above 1 indicates that buyers are dominating the market, often signaling increased confidence among large traders. Historical data shows that spikes in this ratio have often occurred near major price bottoms, leading to substantial rebounds in Bitcoin's price.

For instance, in May 2020, a sustained ratio above 1.05 marked the beginning of a 400% rally from around $8,600 to $43,000. Similar patterns were observed in July 2021 and early 2023, where significant price increases followed whale accumulation.

Decline in Exchange Deposits

Another indicator of growing holding sentiment is the decline in Bitcoin deposits to exchanges. The 30-day moving average of exchange depositing addresses has fallen to approximately 48,000, with daily counts dropping to 37,000. This is a stark contrast to the 2015-2021 period, where deposit activity averaged around 180,000 annually.

This shift is attributed to the rise of spot Bitcoin ETFs, allowing investors to gain exposure to Bitcoin without the need for direct exchange interaction. Additionally, more investors and corporations are viewing Bitcoin as a long-term reserve asset rather than a short-term trading opportunity.

Technical Analysis

On the technical front, Bitcoin's daily chart is forming a classic bull flag pattern, which typically indicates a strong upside move. Since late May, Bitcoin has been consolidating within a downward-sloping channel following a rally from the $92,000 level. The recent bounce from the channel's lower trendline, coupled with support from the 50-day exponential moving average, reinforces the bullish outlook.

If the bull flag pattern plays out, Bitcoin could potentially break above the upper trendline, targeting around $117,700, calculated by adding the height of the flagpole to the breakout point near $103,000.