Cryptocurrencies

Bitcoin (BTC) starts a new week in combative form as it returns $67,000 to

Bitcoin (BTC) starts another week in combative form as $67,000 returns to TradFi markets.

The largest cryptocurrency is close to returning to competition with final resistance around its past and present all-time highs – at $69,000 and $73,800.

Whether it gets there in the coming days is the primary concern facing market participants, and various factors could contribute to the uptrend continuing.

These include signals from US economic policy as the Federal Reserve releases minutes from its May meeting, while US unemployment data is also awaited.

When it comes to Bitcoin price action, traders are becoming more confident that a local bottom has been reached and an uptrend is what should happen after two months of consolidation.

At the same time, there may be a refreshing contrast – prices are higher, but sentiment remains around lower levels than during the peak in March.

Could there be a more sustainable journey to price discovery?

Against this backdrop, Cointelegraph takes a closer look at the issues surrounding the Bitcoin markets this week.

Bitcoin bulls continue to press below all-time highs

Bitcoin certainly made a comeback this week, returning to nearly $67,000 in the Asian session after briefly falling in the weekly close, data from Cointelegraph Markets Pro and TradingView shows.

This short wave of weakness was accompanied by geopolitical uncertainty from Iran, but the markets quickly forgot that as BTC/USD maintained its 10% gains in May.

The latest data from monitoring resource CoinGlass now shows that the bulk of immediate overhead resistance lies just below $68,000.

BTC Liquidation Heatmap (screenshot). Source: Coinglass

Additional data shared with X (formerly Twitter) by IT Tech, a contributor to on-chain analytics platform CryptoQuant, shows the levels of liquidation surrounding the spot price.

Bitcoin (Btc) Starts A New Week In Combative Form As It Returns $67,000 To
BTC Liquidation Levels. Source: IT/X

Commenting on the recent Bitcoin price movement, market participants were in a positive mood.

“The beauty of BTC’s weekly close. Popular Crypto trader Damus noted “the first weekly uptrend sweeping since October 2023.”

Crypto Damus pointed to last week’s candle that erased previous losses to close at $66,210.

Bitcoin (Btc) Starts A New Week In Combative Form As It Returns $67,000 To
BTC/USD 1-week chart. Source: Trading View

Michael van de Poppe, founder and CEO of trading firm MNTrading, reiterated his thoughts on a steady journey towards new highs for Bitcoin.

“Bitcoin will likely continue to move in this range. “I don’t expect massive volatility,” he told X subscribers over the weekend.

“I prefer to expect slow, consolidative moves towards the all-time high.”

Bitcoin (Btc) Starts A New Week In Combative Form As It Returns $67,000 To
Chart of total cryptocurrency market capitalization. Source: Michael van de Poppe/X

However, Van de Poppe added that he expects altcoins to “outperform” while this happens, and these coins have suffered more severely during Bitcoin’s consolidation phase.

Another post predicted a “slow move up, slowly but surely accelerating towards a vertical move in Q3/Q4.”

However, as Cointelegraph reported, not everyone shares these views. Over the weekend, trader and commentator Credible Crypto revealed his belief that $60,000 or lower should come next for BTC/USD.

US jobs data, key week for the Fed

The overall landscape – unlike last week – is not dominated by US economic reports in the coming days.

Instead, the Fed takes center stage in the form of a slew of speeches from senior officials.

While Chairman Jerome Powell is not scheduled to be among them, markets are nonetheless watching the language used by conservatives and others for cues on future policy.

Minutes from the May FOMC meeting, where interest rates were discussed, are scheduled to be published on May 22.

Next, US jobless claims could provide another bout of volatility for risk assets, continuing the trend seen this month and before.

At the same time, attention is increasingly focused on favorable liquidity conditions both in the United States and abroad.

In his latest X content, financial commentator Tedtalksmacro suggested that the crypto bull run is “far from over” as a result.

Tedtalksmacro noted that an early liquidity cycle is now underway, along with M2 money supply showing “significant room to rise to facilitate liquidity conditions.”

He continued his talk about cryptocurrency market trends: “Although liquidity has certainly returned to cryptocurrencies (BTC ETFs), the speed of inflow has not yet seen a frenzy phase corresponding to the cycle peaks.”

Bitcoin (Btc) Starts A New Week In Combative Form As It Returns $67,000 To
US Money Supply M2 Source: Tedtalksmacro/X

Bitcoin ETFs Anticipate the “New Faith” in Bitcoin

Tedtalksmacro touched on what could be a strong comeback from Bitcoin exchange-traded funds (ETFs) in the US.

After struggling for weeks on end since Bitcoin hit all-time highs in March, spot ETF products are seeing renewed interest. Last week, inflows reached nearly $1 billion – the best weekly performance since then.

“Expect these to only increase as prices rise and tradFi renews confidence in the asset again,” Tedtalksmacro concluded.

Demand for ETFs is falling into a new landscape – Bitcoin block support is half what it was in March, and large inflows are causing ETF providers to buy far more Bitcoin than miners are adding to the supply daily.

“Bitcoin ETFs have bought 21,700 Bitcoin ($1.5 billion) in the month so far,” Thomas Fuhrer, CEO of cryptocurrency review portal Apollo, revealed last week.

“This is equivalent to three times the supply of new bitcoin from miners.”

Bitcoin (Btc) Starts A New Week In Combative Form As It Returns $67,000 To
Net Bitcoin ETF Flows. Source: Thomas Fuhrer/X

US spot ETFs alone now hold approximately 2.8% of the total Bitcoin supply.

Bitcoin exchange reserves have fallen to their lowest levels in seven years

When it comes to Bitcoin demand, few statistics tell a more bullish story than Bitcoin exchange reserves.

New data currently circulating on social media puts the amount of Bitcoin available for purchase on major trading platforms at its lowest levels since 2017.

This comes thanks to CryptoQuant, which estimates the number at 1,918,417 BTC as of May 19. A year ago, this was higher by about 400,000 bitcoins.

Bitcoin (Btc) Starts A New Week In Combative Form As It Returns $67,000 To
Exchange BTC reserves. Source: Cryptoquant

“Just in time for a second wave of ETF inflows,” Fuhrer commented on the phenomenon, drawing attention to the combination of a “demand shock” and “inelastic supply” going forward.

“In 2021, during the peak of the bull market, around 2.7 million Bitcoins were held in exchange reserves, with Bitcoin trading for around $69,000. Three years later, reserves have fallen to around 2 million BTC, yet trading prices are near historic highs,” the CryptoQuant contributing analyst wrote in a Quicktake market update last week.

“The recent halving event has halved the potential new supply from miners, significantly reducing the likelihood of new Bitcoin entering the market through sales. Given these dynamics, it becomes difficult to maintain a bearish stance on Bitcoin.”

Sustained greed?

In what could become an encouraging sign for short-term market sentiment, the cryptocurrency Fear and Greed Index is not going through the roof with the current Bitcoin price moving higher.

Related: Bitcoin is setting up a “golden cross,” which last led to a 170% BTC price gain

The index, which uses a combination of factors to determine the sustainability of overall cryptocurrency sentiment, currently stands at 70/100.

Bitcoin (Btc) Starts A New Week In Combative Form As It Returns $67,000 To
Cryptocurrency Fear and Greed Index (screenshot). Source: Al-Badil.me

Despite being “greedy,” this is so far devoid of the extreme levels seen during the journey to Bitcoin’s all-time highs in March, when it reached 90/100.

Through sentiment analysis, research firm Santiment identified the most optimistic sentiment regarding Bitcoin since January.

“Public sentiment has turned towards Bitcoin after the surprise bounce above $66K on Wednesday (and now above $67.2K),” reads part of X’s May 17 post.

Santiment added that FOMO on the part of buyers must remain low for the positive trend to continue.

Bitcoin (Btc) Starts A New Week In Combative Form As It Returns $67,000 To
Bitcoin, Chainlink Sentiment Analysis. Source: Santiment/X

This article does not contain investment advice or recommendations. Every investment and trading move involves risks, and readers should conduct their own research when making a decision.

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