Bitcoin (BTC) starts a new week in fighting form as $67,000 returns with TradFi markets.
The leading cryptocurrency is approaching a potential re-encounter with significant resistance levels, previously and currently reached at around $69,000 and $73,800 respectively.
The primary concern for market participants is whether the market will reach its destination in the near future. Several elements could potentially drive further gains.
As a researcher, I’m keeping a close eye on several developments that could impact the financial markets. One of these factors is the release of minutes from the May meeting of the Federal Reserve, which will provide insights into the central bank’s thinking at that time. Additionally, I’ll be looking closely at the upcoming U.S. unemployment data, which is another important economic indicator that could influence market trends.
In the realm of Bitcoin pricing, traders are growing increasingly optimistic that a recent low point has been reached and that an uptrend may ensue following a two-month period of price stability.
An intriguing contrast could be emerging: Prices have risen, yet there’s a persistent undercurrent of subdued optimism, reminiscent of sentiments observed prior to the March high point.
Could a more sustainable journey to price discovery be on the cards?
Amidst the current scenario, CryptoMoon delves deeper into the Bitcoin market concerns that have emerged this week.
Bitcoin bulls keep up pressure below all-time highs
This week, Bitcoin has bounced back with a vengeance, reaching nearly $67,000 during the Asian trading session following a brief dip below its weekly closing price, according to information from CryptoMoon Markets Pro and TradingView.
During that short period of instability, global political tensions arising from Iran added uncertainty. However, financial markets seemed to dismiss these concerns and continued to uphold Bitcoin’s 10% growth achieved in May.
According to the most recent information from the monitoring tool CoinGlass, the significant barrier to further price increase for Bitcoin is located roughly around $68,000.
New information provided to X (previously known as Twitter) from IT Tech, a notable figure in the on-chain analysis field at CryptoQuant, indicates liquidation thresholds in relation to the current market price.
Commenting on the latest BTC price action, market participants were in a positive mood.
As a researcher studying cryptocurrency trends, I’ve come across an intriguing observation made by the well-known trader, Crypto Damus. He pointed out that for the first time since October 2023, there has been a bullish engulfing weekly close for Bitcoin (BTC).
Crypto Damus referred to last week’s candle erasing previous losses to close at $66,210.
Michaël van de Poppe, the founder and CEO of MNTrading, once again expressed his belief that Bitcoin is on an upward trajectory towards reaching new record-high prices.
“Over the weekend, he shared with X subscribers that Bitcoin is expected to keep trading within its current price range without significant price swings.”
“I’d rather expect consolidation and slow upwards movements towards the all-time high.”
Despite Van de Poppe’s statement that the anticipated altcoins would “shine” or “excel” during Bitcoin’s price stability period, as they had been more adversely affected during Bitcoin’s consolidation phase.
“The pace of growth will gradually pick up in the third and fourth quarters, leading to a significant upward shift.”
According to CryptoMoon’s report, not all investors hold the same optimistic perspective. Over the weekend, trader and analyst Credible C crypto expressed his conviction that the price of Bitcoin could drop to $60,000 or even lower against the US dollar.
U.S. jobs data, Fed headline macro week
In contrast to the previous week, the economic reports from the United States will take a back seat in the larger economic picture that unfolds in the upcoming days.
The Federal Reserve becomes the focal point through numerous public speeches given by its top officials.
Markets pay close attention to the words used by Federal Reserve governors, including Chair Jerome Powell when he’s not present, for indications of upcoming monetary policy shifts.
The minutes detailing the May discussion among the Federal Open Market Committee regarding interest rates will be made public on the 22nd of May.
Afterward, the number of unemployment claims in the United States may cause further turbulence for risky investments, following a pattern observed this month and previously.
As a financial analyst, I’ve noticed that there’s growing interest in the advantageous liquidity situations not just in the United States but also globally.
In his recent financial commentary, Tedtalksmacro indicated that the crypto bull market is still ongoing based on current evidence.
According to Tedtalksmacro’s analysis, an early sign of a liquidity cycle is underway, and there’s ample potential for further ease in liquidity conditions based on the current trend in M2 money supply.
As a crypto investor, I’ve noticed that liquidity has returned to the market with the introduction of Bitcoin ETFs. However, the rate at which new investments are entering the market hasn’t reached the frenzied pace typically seen during cycle tops.
Bitcoin ETFs preempt “new faith” in BTC
In his TED Talk, Tedtalksmacro discussed the potential for a robust recovery of Bitcoin exchange-traded funds (ETFs) in the United States market.
Over the past few weeks, following Bitcoin’s record highs in March, there has been a resurgence of interest in bitcoin exchange-traded fund (ETF) products. last week alone, these funds experienced significant inflows, totaling close to $1 billion – marking their best weekly performance since then.
“Tedtalksmacro predicted that these trends will likely grow even more pronounced as prices continue to rise, and traditional finance (tradFi) may soon regain confidence in this asset.”
As an analyst, I would describe the current situation with regard to Bitcoin ETF demand as follows: The reduction of Bitcoin’s block subsidy by half compared to March levels signifies a significant shift in the market landscape. Consequently, when large inflows occur into Bitcoin ETFs, the providers are compelled to procure substantially more Bitcoin than what is being mined daily.
Last week, Thomas Fahrer, the CEO of crypto reviews portal Apollo, disclosed that Bitcoin ETFs have acquired approximately 21,700 Bitcoins, equivalent to around $1.5 billion, during the current month.
“This is 3X the supply of new bitcoin from miners.”
The U.S. spot ETFs alone now hold approximately 2.8% of the total BTC supply.
Bitcoin exchange reserves plummet to seven-year lows
The level of Bitcoin demand can be suggested by an optimistic indicator – the amount held in Bitcoin reserves at exchanges.
Recent data being shared on social media indicates that the quantity of Bitcoin up for sale on prominent cryptocurrency exchanges is at its minimum level since the year 2017.
As a cryptocurrency analyst, I’d like to share some insights based on data from CryptoQuant. Currently, the estimated Bitcoin (BTC) holdings in exchanges amount to approximately 1,918,417 BTC as of May 19. In contrast, this figure was around 500,000 BTC greater a year ago.
Fahrer observed that we’re experiencing a timely second surge in ETF investments. He highlighted the interplay between heightened demand and inflexible supply as contributing factors moving forward.
As a crypto market analyst, I’ve observed some intriguing trends in the Bitcoin market over the past few years. In 2021, when the bull market reached its peak, roughly 2.7 million Bitcoins were held in exchange reserves, and the digital currency was trading at around $69,000. Now, three years later, the reserve numbers have dropped to approximately 2 million Bitcoin. Despite this decrease, Bitcoin prices are once again approaching historical highs.
“The recent halving event has effectively cut the potential new supply from miners by half, significantly reducing the likelihood of new Bitcoin entering the market through sales. Given these dynamics, it becomes challenging to maintain a bearish stance on Bitcoin.”
Sustainable greed?
As a crypto investor, I’ve noticed that the Crypto Fear & Greed Index isn’t showing excessive fear or greed regarding Bitcoin’s recent price surge. This could be an optimistic indication for short-term market sentiment.
The Index, which evaluates the crypto market’s sustainability based on a variety of indicators, is presently scored at 70 out of a possible 100.
As an analyst, I would rephrase that sentence as follows: The current level of price volatility in Bitcoin is noticeably less extreme than during its peak in March 2021, where it reached nearly 90-100%.
Despite a mood analysis conducted by research firm Santiment, Bitcoin exhibited the strongest optimism among investors since January.
The feeling among the crowd has changed in favor of Bitcoin following its unexpected surge past $66,000 on Wednesday, and now that it’s above $67,200.
As a crypto investor, I understand the excitement of jumping into a potential winning investment. However, according to Santiment’s analysis, keeping my “Fear of Missing Out” (FOMO) in check is crucial for the continued positive trend. In simpler terms, it would be wise not to let the pressure of missing out on a potential gain drive my investment decisions, but instead, make calculated moves based on thorough research and analysis.
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2024-05-20 10:59