Bitcoin (BTC) surpassed $70,000 for the first time in six weeks. Here’s why you should buy Bitcoin below $70,000.
Bitcoin funding rate rises to 6-week high
Bitcoin rose to a six-week high of $71,401 on May 20, a price level not seen since April 9, according to TradingView.
As Bitcoin psychologically recovered above $70,000, funding rates also began to rise. According to Coinglass, Bitcoin’s funding rate rose to 0.0187%, the highest since April 9, suggesting that most traders are buying BTC.
In essence, a positive funding ratio indicates that traders (buyers) taking long Bitcoin positions prefer to use leverage.
Before Bitcoin rose to $70,000, the funding rate has remained below 0.01% over the past month, suggesting Bitcoin buyers are becoming more confident.
BTC price technology favors further rises
Inspiring investor confidence, the Bitcoin 4-hour chart recently printed an inverted head and shoulders pattern, which traders use to identify a trend reversal from a downtrend to an uptrend.
Mustache, a popular cryptocurrency analyst, wrote in a May 21 post:
“As I said yesterday, we are seeing a big green candle in the price of BTC. Do you wish you were listening? Never fade the inverted head and shoulders pattern. Altcoins will follow.”
Related: Bitcoin ETFs are ‘orange FOMO poker chips’ that siphon on-chain funds back into TradFi.
Bitcoin Chart Fractal Mirror Hello
A fractal refers to a technical chart pattern that repeats across multiple time frames and charts, regardless of how much the trader shrinks the price movement of the underlying asset.
From a fractal analysis perspective, Bitcoin’s current rally on the weekly chart looks similar to the November 2021 rally, when BTC rose from $31,000 in July to $69,000 in November.
If the chart pattern repeats, Bitcoin could have more upward momentum in the coming weeks.
Moreover, according to Jelle, a well-known cryptocurrency analyst, Bitcoin’s price trajectory is similar to the 2017 bull market. In a May 21 post, Jelle wrote to her more than 81,000 followers:
“Bitcoin continues to follow the same path as the 2017 bull market. Turbulent air around previous cycle peaks – once you clear these pockets it’s smooth sailing.”
Bitcoin ETF flows turn positive
Additionally, institutional inflows into U.S. spot Bitcoin exchange-traded funds (ETFs) recorded positive inflows for the second straight week, following three weeks of net negative outflows.
According to Dune, U.S. Bitcoin ETFs have accumulated more than $200 million in Bitcoin over the past week, and more than $413 million in the week of May 6.
Bitcoin ETFs saw positive inflows of more than $235 million on May 20, more than last week’s net inflows, according to data from Farside Investors.
Institutional inflows through ETFs have been an important part of Bitcoin’s current all-time high. By February 15, Bitcoin ETFs had surpassed $50,000, accounting for about 75% of new investments in the world’s largest cryptocurrency.
Related: An Ether ETF could push the price of ETH to $10,000, but approval could take until 2025.
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.