Bitcoin, the world's oldest crypto, reached its highest point in almost three months on Saturday before paring back some of the weekend's gains.
Prices have since cooled and are down around 1.5% on a 24-hour basis after reaching a top of $45,300, their highest point since May 18. As of press time, bitcoin is changing hands for around $43,430.
Datamish data shows bitcoin's push to higher price highs (HH) and higher price lows (HL) was precipitated by a short squeeze which saw 126 BTC short positions liquidated on Friday.
"Perpetual funding rates have turned positive, meaning that the derivatives market is clearly positioned to the long side," Toby Chapple, head of trading at digital asset firm Zerocap, told CoinDesk via Telegram. "This positioning is also supported by an expanding futures basis curve, showing that market sentiment is gradually building."
Significant outflows from exchanges have also been accelerating, indicating a lack of short-term selling intent, according to the digital asset firm. Despite market concerns around the proposed crypto tax reporting provision in the U.S. infrastructure bill, institutional activity is once again on the rise.
"This is reflected in the Grayscale premium reaching toward positive territory, albeit slowly," said Chapple, referring to the difference between the value of the assets held by the Grayscale Bitcoin Trust against the market price of those holdings. (Grayscale is a CoinDesk sister company.)
Indeed, on-chain data also suggests further signs of bullish activity. Wallet addresses with greater than 0.1 BTC are at their highest point in two months and have continued to rise since July 28, up to 3.19 million from June 14's 3.14 million, Glassnode data shows.
Whales, or large market participants holding between 100 and 10,000 BTC, continue to build long-term positioning which "bodes well for the structure of the market," according to Zerocap.
Bitcoin's HH and HL bullish charting pattern tells of the risk-taking mood currently brewing in the market which has driven prices toward the 200-day moving average – a significant marker of bullish activity when prices are above and conversely bearish when below.
"The 200-day moving average at approximately $45,000 has provided some resistance – a clean break here could lead to the next accelerated push higher," Chapple said.
Meanwhile, the often touted cousin of bitcoin, gold's spot price, briefly plummeted to a low of $1,681 from around $1,760 on Sunday evening. Prices have continued to build and are sitting around $1,761 per troy ounce.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.