Bitcoin (BTC) is starting the week with strong momentum as it reaches $67,000, bringing it closer to its all-time highs of $69,000 and $73,800. Market participants are eagerly waiting to see if Bitcoin can break these resistance levels in the coming days, and several factors could contribute to a bullish continuation. These factors include cues from US economic policy, such as the release of the Federal Reserve’s minutes from its May meeting and US unemployment data. Traders are becoming increasingly confident that Bitcoin has reached a local bottom and will now see upside after two months of consolidation.
One interesting development is that while Bitcoin’s prices are higher, sentiment levels are lower compared to the peak in March, suggesting a more sustainable journey to price discovery. With this context in mind, let’s take a closer look at the issues surrounding Bitcoin markets this week.
Bitcoin bulls continue to apply pressure below all-time highs, with the cryptocurrency returning to near $67,000 this week. Although there was a brief dip in prices due to geopolitical uncertainty from Iran, Bitcoin quickly recovered and maintained its 10% gains for May. The bulk of immediate overhead resistance is now just below $68,000.
Market participants have expressed positive sentiments about Bitcoin’s recent price action. One popular trader, Crypto Damus, noted that the recent weekly close for Bitcoin was the first bullish engulfing weekly since October 2023. Another trader, Michaël van de Poppe, expects Bitcoin to continue moving within its current range, with altcoins outperforming during this period. He predicts a slow upwards grind for Bitcoin, followed by a vertical move in the third or fourth quarter of the year.
However, not everyone shares these optimistic views. Trader and commentator Credible Crypto believes that Bitcoin could drop to $60,000 or even lower in the near future.
In terms of the macro landscape, the focus this week is on the Federal Reserve’s speeches and the release of the minutes from its May meeting. These events will provide insights into future US economic policy. Additionally, US jobless claims could introduce more volatility to risk assets. Attention is also shifting towards favorable liquidity conditions in the US and beyond, which could further support the crypto bull run.
There is renewed interest in US spot Bitcoin exchange-traded funds (ETFs), with inflows reaching almost $1 billion last week, the highest since Bitcoin’s all-time highs in March. This renewed demand comes at a time when Bitcoin’s block subsidy is half of what it was in March, and large ETF inflows require ETF providers to purchase more BTC than the daily supply added by miners.
Another bullish sign is the decline in Bitcoin reserves on major trading platforms, which are at their lowest levels since 2017. This decrease in exchange BTC reserves, combined with the increasing demand for ETFs, could contribute to a supply shock and support further price appreciation.
Despite the recent price increase, the Crypto Fear & Greed Index is not showing extreme levels of greed, which is a positive sign for short-term market sentiment. While the index is currently at 70/100, indicating greed, it is far from the excessive levels seen during Bitcoin’s all-time highs in March.
Overall, the sentiment towards Bitcoin has become more bullish, with buyers showing increased interest after Bitcoin’s bounce above $66,000. However, it is important for the FOMO (fear of missing out) sentiment to remain low in order for the positive trend to continue.
Please note that this article does not provide investment advice or recommendations, and readers should conduct their own research before making any investment decisions.