Bitcoin Reclaims $27,000, Here Are the Factors Driving the Recovery

Bitcoin started another recovery trend over the weekend and has been on an uptrend ever since. This follows the incredible bearish movement of the past week, which saw the digital asset break below the $26,000 mark for the first time in a month. However, the bulls are once again starting to pick up steam, but what could it be?

Bitcoin continues to accumulate

Now, while the drop in prices may be a deterrent for some, others have taken the opportunity to fill their purses. The ‘Wholecoiner’ movement consists of bitcoin supporters who aim to get their holdings down to at least 1 BTC, creating a complete coin.

This trend has been on the rise over the past few years and recently hit a significant milestone over the weekend. Data from on-chain aggregator Glassnode shows that as of today, there are more than 1 million addresses holding at least 1 BTC for the first time in history.

Addresses holding at least 1 BTC cross 1 million | Source: Glassnode

The new milestone arrived at a time when the space was hemorrhaging cryptocurrencies, presenting a unique opportunity for investors to acquire them at low prices. Expectation of better prices from here as well as uncertainty in the banking industry has been a driver in this accumulation trend.

Naturally, when investors are hoarding coins as they are now, this reduces the supply in the market. Reduced supply creates a shortage, and this shortage can lead to higher prices. So there could be a scenario that played out during the weekend.

BTC price recovers above $27,000 | Source: BTCUSD on TradingView.com

BTC investor sentiment is on the rise

As the price of bitcoin plummeted last week, investor sentiment went down with it, causing the Crypto Fear and Greed Index to fall below the 50 level once again. While the index still remained in the neutral zone, it was bearish considering that just a couple of weeks ago the index was sitting on a higher greed.

However, as the price of BTC has soared, sentiment has followed suit. The index is now sitting at a neutral score of 50. This puts the bears and bulls at an impasse, meaning that each will have to show more strength than the other to swing the price in their favor.

While not back in the green, it is an improvement from yesterday’s score of 48, which came dangerously close to driving investor sentiment back into the fear zone.

If BTC manages to maintain its current recovery trend, investor sentiment will turn increasingly positive. However, the support at $27,000 remains quite shaky and this means that the bears could easily take over the market, especially if the momentum turns down.