Bitcoin Hits $70,000 Amid Growing Spot and ETF Buying
The Bitcoin price recently soared to the significant $70,000 level, fueled by a marked increase in spot buying and investments in spot BTC exchange-traded funds (ETFs).
This has led the cryptocurrency community to debate whether this marks the early stages of a bull market or its peak.
The analyst known as "ELI5 of TLDR" mentioned that while the majority of on-chain indicators suggest the beginning of a bull market, a few do indicate possible topping patterns.
The recent rebound from the support level near $60,000 has intensified interest, with Farside Investors noting around $950 million in inflows last week alone, a high not reached since March.
If this trend persists, BTC might surpass current expectations.
At present, BTC is trading just shy of $70,000, with the 20-day EMA positioned at $64,371 and a favorable RSI hinting at a probable upward breakout.
Breaking past the $68,000 resistance level suggests BTC could aim for $73,777, although reaching this point might provoke a significant bearish reaction.
On the flip side, a fall below the moving averages could indicate a move toward a bearish trend, with potential declines to $59,600 and $56,552.
In a broader economic view, Bitcoin’s 51% gain since the beginning of the year reflects investor anticipation of U.S. monetary expansion, which has seen the M2 monetary base grow to over $21.0 trillion as of April 2024.
This rise in the money supply signals increased inflationary pressures, despite a general hesitancy to spend by businesses and individuals.
How the United States Federal Reserve manages inflation and strives to prevent a recession could influence the liquidity and thus the appeal of finite resources like Bitcoin.
Further bolstering the optimistic outlook, BTC reserves on exchanges have fallen to a seven-year low.
According to CryptoQuant, there were only 1,918,417 BTC available on major trading platforms as of May 19, significantly down from the previous year.
This scarcity, along with the recent halving event that reduced the potential new supply from miners, makes a bearish perspective on Bitcoin increasingly challenging to defend.
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
