Bitcoin (BTC) has surged to the highly sought-after $70,000 mark, driven by an increase in spot buying and spot BTC exchange-traded fund (ETF) purchases. This has sparked a debate within the cryptocurrency community about whether the bull market is just beginning or nearing its peak.
According to analyst “ELI5 of TLDR,” most on-chain indicators suggest that a bull market is emerging, despite some showing topping patterns. The recent bounce in support near $60,000 has generated more interest, with Farside Investors reporting inflows of approximately $950 million last week, the highest since March.
The BTC/USDT daily chart shows that if this trend continues, BTC could potentially surpass expectations. Currently, BTC is trading just a few hundred dollars below $70,000, with the 20-day exponential moving average (EMA) at $64,371 and a positive relative strength index (RSI), indicating a higher chance of an upward breakout. Breaking through the $68,000 resistance level suggests that the BTC price could reach $73,777, although this level may trigger a strong bearish response. On the other hand, a break below the moving averages could signal a bearish downturn, with potential drops to $59,600 and $56,552.
Bitcoin’s 51% year-to-date gain reflects investors’ anticipation of U.S. monetary expansion, with the M2 monetary base surpassing $21.0 trillion in April 2024. This increase in circulating money suggests rising inflationary pressures, despite some hesitancy in spending by companies and individuals. The strategies implemented by the U.S. Federal Reserve to manage inflation and avoid a recession could impact the liquidity and attractiveness of scarce assets like Bitcoin.
In addition to these factors, exchange BTC reserves have reached a seven-year low, with only 1,918,417 BTC available on major trading platforms as of May 19, according to CryptoQuant data. This scarcity, combined with the recent halving event that has reduced the potential new supply from miners, makes it increasingly difficult to justify a bearish stance on Bitcoin.
It is important to note that this article does not provide investment advice or recommendations. All investment and trading decisions involve risk, and readers should conduct their own research before making any decisions.