Bitcoin (BTC) Price Prediction: Technical Indicators Signal Upside as Exchange Supply Shrinks

Bitcoin price is currently trading above $98,000, buoyed by strong technical indicators and notable Bitcoin exchange traded fund (ETF) inflows.

Bitcoin price showed signs of bullish continuation on February 6, 2025, as recent data highlighted strong inflows into United States-based spot Bitcoin exchange traded funds (ETFs) and a reduction in BTC held on centralized exchanges.

Bitcoin price attempts to hold above $98,000 amid a bullish technical outlook and notable ETF inflows. Here's an interesting take on recent Bitcoin price prediction models.

Recent market data showed that despite occasional drops below the $98,000 mark since early November 2024, BTC price has largely maintained a bullish trend, sparking rallies that pushed its price to new highs.

Bitcoin exchange supply shrinks

One factor contributing to the bullish outlook is a reduction in Bitcoin held on centralized exchanges. Data from Coinglass shows that BTC balances on exchanges have fallen by 13% over the past six months.

On Aug. 9, 2024, exchanges held 3.1 million BTC, but by Feb. 5, 2025, this number had dropped to 2.67 million BTC — a six-year low. This decline comes even as the Bitcoin price increased by over 60% during the same period.

Investors appear to be moving their holdings to self-custody wallets, which could indicate a long-term view rather than an immediate readiness to sell their BTC holdings.

On Feb. 5 alone, data from Santiment showed that over 17,000 BTC were withdrawn from exchanges, with 15,000 BTC leaving Coinbase in the United States.

These figures underscore a growing trend where holders are removing Bitcoin from exchanges, reducing the available supply and potentially supporting higher prices.

Institutional inflows bolster market confidence

Another key factor in the bullish outlook is the continued institutional interest, especially with the strong inflows into U.S.-based spot Bitcoin ETFs. Over the past two weeks, these ETFs have attracted around $2.5 billion in fresh capital.

Since their launch on Jan. 11, 2024, these investment vehicles have accumulated nearly $40 billion in assets. Data from Farside Investors confirms this substantial ETF capital influx, which has contributed to Bitcoin's rising price.

Additionally, the Digital Asset Fund Flows Weekly Report from CoinShares noted net inflows of $486 million into BTC investment funds for the week ending Jan. 31, 2024.

This steady stream of institutional investment is a crucial element of the current bullish sentiment in the crypto market, which is also being influenced by other factors.

Weakening dollar adds bullish case to Bitcoin price prediction

Market dynamics are also favoring Bitcoin as the U.S. dollar index (DXY) declines. The DXY, which measures the strength of the U.S. dollar against major global currencies, dropped 1.7% from a high of 109.5 on Feb. 3, 2024, to 107.6.

The index hit a low of 106.91 on Feb. 5 before recovering slightly, but a weakening dollar is generally supportive of risk assets like Bitcoin.

According to crypto influencer Lark Davis, a declining DXY coupled with ongoing bullish catalysts such as ETF inflows and institutional activity could pave the way for the next crypto market upswing.

These comments align with data and analysis from Cointelegraph, TradingView and Santiment.

Bitcoin price prediction: Technical indicators signal upside

Bitcoin price action is drawing attention. Trading at $98,086, the BTC daily chart on TradingView reveals a bull flag formation — a pattern many analysts view as a precursor to further upward movement.

A key level to watch is $101,800. A weekly candlestick close above this figure could confirm the formation and set the stage for a significant rally, with projections reaching above $16,000, representing roughly a 70% increase from current levels.

The relative strength index (RSI) is at 63, indicating that the current momentum favors buyers.