Bitcoin (BTC) has reached the highly anticipated $70,000 mark as a result of increased spot buying and spot BTC exchange-traded fund (ETF) purchases. This surge in activity has led the cryptocurrency community to question whether the bull market is just beginning or nearing its peak.
Analyst “ELI5 of TLDR” has suggested that despite some indications of topping patterns, the majority of on-chain indicators point to a nascent bull market. The recent bounce in support near $60,000 has generated more interest, with Farside Investors reporting approximately $950 million in inflows last week, a figure not seen since March.
In light of this trend, BTC has the potential to exceed expectations. It is currently trading just a few hundred dollars below $70,000, with the 20-day EMA at $64,371 and a positive RSI indicating a higher likelihood of an upward breakout. If it manages to overcome the $68,000 resistance, it 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, as evidenced by 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 United States Federal Reserve to manage inflation and avoid a recession could impact the liquidity and attractiveness of scarce assets like Bitcoin.
Furthermore, 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, along 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. Every investment and trading decision carries risks, and readers should conduct their own research before making any decisions.