Amid a notable surge in spot purchases and spot BTC exchange-traded fund (ETF) purchases, the price of Bitcoin (BTC) has rebounded to the coveted $70,000 level, and the cryptocurrency community is wondering whether the bull market has just begun or is nearing its peak. I’m wondering if I’m losing.
Bitcoin charts and spot ETF activity highlight a trend reversal.
Analyst “ELI5 at TLDR” suggested that most on-chain indicators are pointing to an early bull market, despite showing some upper-level patterns. A recent bounce in support near $60,000 has heightened interest, with Farside Investors reporting inflows of around $950 million last week, numbers not seen since March.
If this trend continues, BTC could potentially exceed expectations. Currently, BTC is trading within hundreds of dollars of $70,000, with a 20-day EMA of $64,371 and a positive RSI indicating a higher breakout is likely. Breaking the $68,000 resistance would mean the BTC price is heading towards $73,777, although this level could trigger a strong bearish reaction.
Conversely, a fall below the moving average could indicate a bearish downtrend, potentially leading to a decline to $59,600 and $56,552.
Bitcoin price rises due to US monetary policy changes
In a broader economic context, Bitcoin’s 51% year-to-date gain reflects investor expectations of U.S. monetary expansion, which has pushed the M2 currency base past $21 trillion in April 2024.
This increase in circulating money suggests that inflationary pressures may be rising, even though businesses and individuals have been hesitant to spend for some time. The U.S. Federal Reserve’s strategy to manage inflation and avoid a recession could affect liquidity and, in turn, the attractiveness of scarce assets such as Bitcoin.
Related: ETF Buys 3X New BTC Supply — 5 Things to Know in Bitcoin This Week
As Bitcoin approaches all-time highs, exchange holdings hit a seven-year low.
Adding to the optimism, exchange BTC holdings have plummeted to a seven-year low, with only 1,918,417 BTC available on major trading platforms as of May 19, according to CryptoQuant data, a significant decline from the previous year.
This scarcity, combined with the recent halving event that halved miners’ potential new supply, makes it increasingly difficult to justify a bearish stance on Bitcoin.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.