Bitcoin Surpasses $70,000 Amid Higher ETF Activity
21 May, 2024 ● Coin news
Bitcoin's price soared above the coveted $70,000 threshold, driven by a noticeable increase in spot buying and purchases of spot BTC exchange-traded funds (ETFs).
This has left the cryptocurrency community wondering whether this is just the start of a bull market or if it is approaching its peak.
The analyst "ELI5 of TLDR" indicated that while some on-chain indicators suggest a topping pattern, the majority still signal the early stages of a bull market.
A recent rebound from around $60,000 has fueled interest, evidenced by Farside Investors recording approximately $950 million in inflows last week, the highest since March.
If this momentum persists, BTC might surpass current expectations.
Presently, BTC is hovering just below $70,000, with its 20-day EMA at $64,371 and a positive RSI, suggesting a probable upward breakout.
Breaking past the $68,000 resistance level could pave the way for BTC to reach $73,777, although this point might provoke a significant bearish reaction.
On the other hand, a decline below the moving averages could indicate a shift to a bearish trend, with potential declines to $59,600 and $56,552.
Economically, Bitcoin’s 51% gain since the start of the year mirrors investor expectations for U.S. monetary expansion, which saw the M2 money supply exceed $21.0 trillion as of April 2024.
This increase in available money is a sign of potential inflationary pressures, even as companies and individuals show reluctance to spend.
The strategies of the United States Federal Reserve to control inflation and stave off a recession will influence the liquidity and thus the appeal of finite resources like Bitcoin.
Further bolstering the bullish outlook, the reserves of BTC on exchanges have dropped to a seven-year low.
According to CryptoQuant, only 1,918,417 BTC remain on major trading platforms as of May 19, a notable reduction from last year.
This reduced availability, together with the recent halving event that cut the potential new supply from miners in half, makes it increasingly challenging to support a bearish view on Bitcoin.
Sources:
https://cointelegraph.com/news/bitcoin-price-hits-70k-as-spot-and-btc-etf-buying-surges
https://cryptoquant.com/asset/btc/chart/exchange-flows/exchange-reserve
