Bitcoin (BTC) Price Surges Above $94,000 on Sunday as Market Makers Adjust Their Strategies

Bitcoin (BTC) price has recently experienced notable volatility, driven by significant market developments and investor activity.

Bitcoin (BTC) price has recently shown significant volatility with new market developments and investor activity impacting the major cryptocurrency.

Following a recent decline, BTC surged to highs of over $94,000 on Sunday as new reports pointed to a US strategic crypto reserve that includes BTC and other major digital assets. However, at the time of writing, BTC/USD is now trading just below $93,000, signaling unstable upward momentum.

As such, CryptoQuant analyst KriptoBaykusV2 has spotted an interesting pattern in Bitcoin’s net exchange flow, which may offer some insight into investor sentiment. According to the analyst, exchange inflows and outflows could be crucial for determining Bitcoin’s short-term price direction.

On February 25, Bitcoin saw a large inflow into exchanges, with around 8,400 BTC being deposited. According to KriptoBaykusV2, such large inflows usually suggest increased selling pressure, as traders move assets to exchanges ahead of liquidation.

This was later followed by a decline in Bitcoin price, which aligns with previous market trends, where increased supply on exchanges often leads to downward price movements.

The following day, February 26, saw a shift with a substantial amount of BTC being withdrawn from exchanges. Large-scale outflows usually indicate a preference for holding, decreasing the available supply on exchanges and potentially supporting price stability.

This shift in trend also coincided with Bitcoin price finding support and beginning to recover, which reflects investor confidence in the asset’s long-term prospects. The analyst added:

"In summary, those who follow Bitcoin's exchange movements closely should note: Large inflows into exchanges may indicate a build-up of selling pressure, which calls for caution. On the other hand, significant outflows suggest that investors are choosing to hold, potentially leading to price increases. We'll observe how these trends develop in the coming days."

Another CryptoQuant analyst, abramchart, spotted an interesting trend in the Spent Output Profit Ratio (SOPR) index, which measures the profitability of short-term investors. According to the analyst, the SOPR index recently reached 0.95.

This level is the lowest since August 2024 and suggests that more traders are selling BTC at a loss, which is an indication of capitulation. Typically, such periods are followed by market recoveries as selling pressure lessens and accumulation phases begin. The CryptoQuant analyst wrote:

"Values over 1 indicate that more short-term investors in the last 155 days are selling at a profit. Values less than 1 indicate that more short-term investors are selling at a loss., which is a sign of capitulation and a return to an upward trend."