Bitcoin Scarcity Index Spikes For First Time Since June: Accumulation In Play?

Bitcoin is at a crossroads, with analysts divided on its next ￰0￱ argue that demand is fading, raising concerns of a deeper correction, while others point to the potential for a breakout that could push BTC above its all-time ￰1￱ uncertainty is not without cause—the market is bracing for the US Federal Reserve’s decision on interest rates, a pivotal event that could shape price action in the days ￰2￱ to fresh data from CryptoQuant, Bitcoin just flashed a significant ￰3￱ Bitcoin Scarcity Index on Binance, the world’s largest trading platform, spiked yesterday—the first such move since ￰4￱ sudden jump usually suggests a major shift in market structure, often triggered by large withdrawals of BTC from exchanges or a sharp drop in sell ￰5￱ scenarios reflect a tightening of supply, making Bitcoin scarcer in the open market.

Historically, such spikes have coincided with the entry of institutional players or large whales buying ￰6￱ this points toward accumulation, it also underscores the high-stakes ￰7￱ the Fed’s decision imminent, the market could be on the verge of a decisive move that sets the tone for the rest of the ￰8￱ Scarcity Index Signals Market Crossroads According to Arab Chain on CryptoQuant, the recent spike in the Bitcoin Scarcity Index reflects a sudden imbalance between buyers and available ￰9￱ index jumps when immediate buying power overwhelms market liquidity, often creating a scenario where investors race to acquire BTC before prices move higher.

Historically, such spikes have coincided with positive developments or inflows of fresh ￰10￱ fact, the same pattern occurred last June and lasted several days, fueling Bitcoin’s rally to nearly $124,000. If the current reading remains elevated for multiple sessions, it could signal the start of a strong accumulation ￰11￱ conditions often precede sustained uptrends as whales and institutions absorb supply, reducing the amount of Bitcoin available on exchanges. However, the index also carries risk signals. A sharp rise followed by a rapid decline, as appears to be unfolding now, may suggest speculative behavior or forced ￰12￱ dynamic typically leads to a period of cooling, marked by sideways consolidation or even short-term ￰13￱ broader context complicates the ￰14￱ recent months, the index reached record highs—above +6—only to collapse back toward neutral and even negative ￰15￱ stark contrast reveals that while price remains strong, underlying demand momentum may be ￰16￱ exchange withdrawals slow or supply increases, the scarcity effect could ￰17￱ the Federal Reserve’s decision on interest rates just ahead, the question remains whether this spike reflects true accumulation or another fleeting burst of speculative ￰18￱ next few days will provide ￰19￱ Price Analysis: Testing Mid-Range Levels Bitcoin’s 3-day chart shows the price consolidating around $115,479, following a recovery from early September’s dip near $110,000.

The structure highlights a mid-range battle, as BTC trades between the 200-day SMA near $82,600 and resistance at $123,217, the level that capped the July ￰20￱ 50-day SMA at $109,580 is acting as dynamic support, preventing deeper retracement despite repeated tests. Meanwhile, the 100-day SMA at $101,291 remains comfortably below the current price, reflecting an overall bullish medium-term ￰21￱ has consistently defended higher lows since April, suggesting accumulation remains present. However, upside momentum appears capped, with sellers stepping in near $116,000–$117,000. A decisive breakout above $123,217 would likely trigger a push toward uncharted territory, potentially targeting $130,000+.

On the other hand, failure to maintain support above $110,000 could open the door to deeper retracements, with $105,000 emerging as the first major downside ￰22￱ chart reflects a market at a turning point: steady accumulation is supporting the price, yet resistance remains ￰23￱ the Fed’s interest rate decision approaching, volatility is expected to rise. Bitcoin’s ability to either break past $123K or hold the $110K floor will define the next ￰24￱ image from Dall-E, chart from TradingView