Bitcoin (BTC) enters the new week with strong momentum as it approaches key resistance levels. The cryptocurrency is inching closer to challenging the all-time highs of $69,000 and $73,800. Market participants are eagerly waiting to see if BTC can reach these levels in the coming days. Several factors could contribute to a bullish continuation, including cues from US economic policy as the Federal Reserve releases minutes from its May meeting and US unemployment data. Traders are becoming more confident that BTC has found a local bottom and are expecting an upward move after two months of consolidation. Interestingly, while prices are higher, sentiment remains relatively low compared to the peak in March, suggesting a more sustainable journey to price discovery may be on the horizon. In this article, we will take a closer look at the issues surrounding Bitcoin markets this week.
BTC bulls are maintaining pressure below all-time highs. The cryptocurrency has returned to near $67,000 after briefly dipping into the weekly close. Despite geopolitical uncertainty from Iran, BTC has preserved its 10% gains from May. Immediate overhead resistance is now just below $68,000.
Data from monitoring resource CoinGlass shows the levels of liquidation surrounding the spot price of BTC. The latest data suggests that BTC is in a positive trend, with a bullish engulfing weekly close and the potential for steady growth towards new highs. However, not all traders share this sentiment, as some believe that BTC/USD could drop to $60,000 or even lower.
In terms of the macro landscape, the focus is shifting towards the Federal Reserve and its future policy. The minutes from the May meeting of the Federal Open Market Committee, where interest rates were discussed, will be released on May 22. US jobless claims could also impact risk assets and cause volatility in the market. Attention is also being given to favorable liquidity conditions in the US and beyond, which could contribute to a continued crypto bull run.
Bitcoin exchange-traded funds (ETFs) are gaining renewed interest as BTC’s block subsidy is halved and large inflows cause ETF providers to purchase more BTC than miners are adding to the supply daily. In the month to date, Bitcoin ETFs have purchased 21,700 BTC, equivalent to $1.5 billion. The spot ETFs now hold around 2.8% of the total BTC supply.
Another bullish sign for Bitcoin is the decreasing exchange BTC reserves. The amount of Bitcoin available for purchase on major trading platforms is at its lowest level since 2017. This combination of decreasing supply and increasing demand, particularly from ETFs, could contribute to further price appreciation.
Despite the recent price increase, the Crypto Fear & Greed Index remains at a relatively moderate level of 70/100. This suggests that market sentiment is not overly greedy and is not reaching the extreme levels seen during the previous all-time highs in March. However, research firm Santiment notes that the sentiment has shifted towards Bitcoin and that buyer FOMO needs to remain low for the positive trend to continue.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and analysis before making any investment decisions.