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⚡Market Sees Bitcoin Profit-Taking at $70K🛫

Croxroad

05 Jun 2024 — 3 min read

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⏳ Bitcoin's $70K Hurdle

Bitcoin (BTC) slid to $69,200 early Tuesday amid profit-taking after briefly crossing the $70,000 level late Monday. The price action across major tokens was mixed, with BTC prices moving alongside broader U.S. stock markets, reflecting risky bets in the market. Some meme stocks and tokens surged more than 100% on the apparent return of influential equity trader Keith Gill. Despite the dip, sentiment around Bitcoin remains bullish due to strong long-term holder conviction and anticipation of further spot ETF approvals.

Crypto exchange Bitfinex reported on Monday that Bitcoin's slump since March was likely driven by long-term holders selling. However, blockchain data indicates that this trend has stalled, with investors now accumulating BTC. On-chain analysis firm CryptoQuant shared with CoinDesk that 50% of the long-term Bitcoin supply is “inactive,” showing no movements or changes in holdings across tracked wallets. This inactivity is seen as a sign of strong long-term conviction, suggesting potential for further price gains.

Sentiment around Bitcoin’s growth remains “stubbornly bullish,” according to Singapore-based QCP Capital, which has noted an increase in trading activity. QCP stated that despite negative headlines about Mt. Gox and the DMM hack last week, BTC rallied confidently above $69,000 in Asia. This bullishness is expected to persist as the market anticipates the introduction of an ETH spot ETF, which could usher in new demand. Speculators are also increasing long positions in other major cryptocurrencies in anticipation of additional spot ETF approvals in the near future, further supporting the optimistic outlook for Bitcoin.

◼️ BlackRock's Bitcoin ETF Thrives

The U.S.-based spot bitcoin ETFs yesterday marked 15 consecutive sessions of net inflows, with the recent surge of capital combining with a rally in the price of Bitcoin (BTC) to propel BlackRock's iShares Bitcoin Fund (IBIT) to over $20 billion in assets under management for the first time. According to Bloomberg Intelligence senior ETF analyst Eric Balchunas, the ETFs accumulated approximately $2.4 billion in fresh funds over the past month, making it the third-largest net inflow across the entire ETF market. "The ability to bounce back with renewed interest after a couple nasty selloffs is rare for hot sauce type strategies," Balchunas noted in a post on X. "[It] shows staying power."

Following the initial excitement surrounding the launch of spot ETFs, inflows significantly slowed down in April, even turning negative for several days, which experts at the time considered a normal occurrence. However, since May 16, net inflows have averaged $140 million per day, according to data from Farside Investors. IBIT has been at the forefront of this resurgence, attracting $1.1 billion during this period and maintaining its position as the strongest performer among the ten funds.

As of yesterday, IBIT held 291,563 bitcoins valued at $20.15 billion. This resurgence in investor interest and the robust performance of spot bitcoin ETFs, particularly IBIT, highlights the growing confidence and long-term conviction in Bitcoin as an asset class. The consistent inflows despite previous market volatility underscore the resilience and appeal of Bitcoin investment strategies among institutional and retail investors alike.

🌋 Volume

Volume refers to the total amount of currency being traded in the open market at any given moment. In cryptocurrency markets, volume is typically measured over a 24-hour period, indicating the level of trading activity and liquidity of a particular asset.