Bitcoin’s recent price behavior suggests a big move is imminent.Note how prices have been hemmed into a tighter “triangle” trading range of late.Since hitting a two-month low coming into May 2024, when prices fell into sub-$60k waters, prices of the world’s largest crypto have been on a recovery.Prices have since found support from a lower upward trendline, along with its 21-day simple moving average (SMA).
Bitcoin climbed almost 13% last month, with year-to-date gains exceeding 60%.
However, Bitcoin’s attempts to secure a daily close above the psychologically important $70k mark in recent sessions have so far proven unsuccessful.And since posting a new intraday record high of $73,850 on March 14th, Bitcoin has only managed lower-highs, forming a downward-sloping upper trendline since.
Ultimately, something has to give, i.e. a breakout is bound to happen soon.
Factors supressing Bitcoin prices recently
There have been several events that may have cast a risk-off cloud over Bitcoin:
Major Crypto Exchange Hack: Japanese crypto exchange, DMM, experienced one of the largest hacks of a digital asset exchange. Some US$ 301 million worth of Bitcoin (about 4503 Bitcoins) were in engulfed in what’s said as the 7th-biggest crypto hack ever.
Concerns over Mt. Gox Bitcoin Release: Markets are bracing for the release of some US$ 9 billion worth of Bitcoin into the market from the now-defunct exchange Mt. Gox, a decade after it filed for bankruptcy. The cryptos are expected to be released in “a while” through end-October, potentially supressing prices in the months ahead.
Even the brief resurgence of the meme-stock mania at the onset of this week, which sent GameStop’s stock prices soaring by over 100% in Monday’s pre-market before relinquishing most of its gains during the cash session, wasn’t enough to keep Bitcoin sustainably above the $70k mark.
Bitcoin’s long-term outlook
Spot Bitcoin ETFs: Spot Bitcoin exchange-traded funds (ETFs) have been attracting substantial fund inflows from investors. BlackRock’s iShares Bitcoin Trust, the most successful spot Bitcoin ETF by assets held, now manages about $20 billion – making it the world’s largest spot Bitcoin fund. As long as these gigantic asset managers continue to draw in demand from investors, Bitcoin should maintain a supportive bid.
Potential Fed Rate Cuts: If the Federal Reserve begins lowering US interest rates by year-end, it could fuel risk-taking activities across global financial markets, potentially boosting Bitcoin prices.
Bitcoin’s short-term outlook
US jobs report due Friday, June 7th: As the crypto sector matures and continues garnering acceptance among the mainstream financial sector, it has been more sensitive to macro developments. Hence, this Friday’s US nonfarm payrolls (NFP) may trigger a near-term breakout.
Psychological boost from daily close above $70,000: If Bitcoin can secure a daily close above this psychologically-important round number, that could send another bullish signal to crypto fans to come in off the sidelines and continue sending prices higher.
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