Bitcoin (BTC) has made a strong rally, surging past the coveted $70,000 mark and touching $71,785.
Bitcoin (BTC) has made a strong rally, surging past the coveted $70,000 mark and touching $71,785, as spot buying and the growing interest in spot Bitcoin exchange-traded funds (ETFs) contributed to the bullish momentum.
While some analysts have suggested that certain indicators are showing market top patterns, the majority of on-chain indicators indicate the presence of a nascent bull market. The recent bounce in support near $60,000 has generated increased interest, with Farside Investors reporting inflows of approximately $950 million last week, a level not seen since March.
Bitcoin's 51% year-to-date gain aligns with investors' expectations of U.S. monetary expansion. The M2 monetary base in the United States surpassed $21.0 trillion in April 2024, indicating rising inflationary pressures despite some hesitancy in spending by individuals and companies. The strategies employed by the United States Federal Reserve to manage inflation and avoid a recession could impact liquidity and the attractiveness of scarce assets like Bitcoin.
Further fueling the bullish sentiment, BTC reserves on exchanges have hit a seven-year low, according to CryptoQuant data. As of May 19, major trading platforms held only 1,918,417 BTC, a significant decrease compared to the previous year. This scarcity, combined with the recent halving event that reduced the potential new supply from miners, makes it increasingly challenging to justify a bearish stance on Bitcoin.
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