The price of Bitcoin (BTC) rose to the coveted $70,000 level, and a rally was observed

The price of Bitcoin (BTC) has risen to the coveted $70,000 level, and a significant spike in spot buying and Bitcoin exchange-traded fund (ETF) buying investments has also been observed, as the cryptocurrency community ponders whether the bull market has just begun or is approaching its peak. .

Bitcoin charts and ETF activity highlight trend reversal

Analyst “ELI5 of TLDR” notes that the majority of on-chain indicators point to an emerging bull market, although some are showing topping patterns. The recent support bounce near $60,000 has sparked increased interest, with Farside Investors reporting inflows of nearly $950 million in the past week, a number not seen since March.

BTC/USDT daily chart. source: TradingView

If this trend continues, Bitcoin will likely exceed expectations. Currently, BTC is trading within a few hundred dollars of $70,000, with a 20-day EMA at $64,371, and a positive RSI suggests an upward breakout is more likely. Overcoming the $68,000 resistance suggests that BTC price is on its way to $73,777, although this level could trigger a strong bearish response.

Conversely, a break below the moving averages could signal a bearish pullback, with a possible decline to $59,600 and $56,552.

The change in US monetary policy boosts the price of Bitcoin

In the broader economic context, Bitcoin’s 51% year-to-date gain reflects investors’ expectations for US monetary expansion, which has seen the M2 monetary base exceed $21.0 trillion in April 2024.

The Price Of Bitcoin (Btc) Rose To The Coveted $70,000 Level, And A Rally Was Observed
USA Wider M2 Monetary Base, US$1 billion. Source: Federal Reserve Bank

This increase in money in circulation indicates rising inflationary pressures despite a period of hesitation in spending by companies and individuals. The Fed’s strategies for managing inflation and avoiding recession could affect liquidity and thus the attractiveness of scarce assets like Bitcoin.

Related: ETFs Buy 3x New BTC Supply – 5 Things to Know in Bitcoin This Week

Exchange reserves hit a 7-year low as Bitcoin approaches an all-time high

Adding to the bullish sentiment, Bitcoin reserves on the exchange fell to a seven-year low, with Cryptoquant data showing just 1,918,417 BTC available on major trading platforms as of May 19, a significant decline from the previous year.

The Price Of Bitcoin (Btc) Rose To The Coveted $70,000 Level, And A Rally Was Observed
Exchange BTC reserves. Source: Cryptoquant

This scarcity, coupled with a recent halving event that halved the potential new supply from miners, makes it increasingly difficult to justify a bearish stance on Bitcoin.

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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