After enduring a major 20% price correction earlier this month that saw bitcoin fall below $56,400 and increase outflows from the bitcoin ETF market, the world's largest cryptocurrency has managed to make a strong comeback. It has broken through the key resistance level of $66,000 and turned it into a new support zone.
btc Rebounds as bitcoin ETF Inflows Rise
The bitcoin price resurgence has been closely linked to a resurgence of inflows into the US bitcoin ETF spot market. Data from Farside shows that bitcoin spot ETFs experienced their best week of inflows in two months, with the US fund category collectively recording $948 million in positive net flows from May 13-17.
Interestingly, the majority of these inflows, approximately 89%, occurred in the last three trading days of the week, which analysts and industry researchers such as James Butterfill of CoinShares attribute to a change in investor sentiment following the publication of a price lower than expected Consumer's price index (CPI) on Wednesday. Butterfill stated:
The inflows were an immediate response to the lower-than-expected CPI report, highlighting our view that bitcoin prices have re-aligned with interest rate expectations.
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Regionally, in In terms of the overall bitcoin market, the United States dominated inflows with $1.002 million, while Switzerland and Germany also recorded small inflows of $27 million and $4.2 million, respectively.
Notably, the bitcoin Trust in Grayscalewhich has seen outflows of $16.6 billion since the launch of the first bitcoin ETF in January, recorded small inflows totaling $18 million.
Beyond bitcoin ETFs, the digital asset investment product space experienced tickets for the second consecutive week, for a total of $932 million, according to CoinShares. However, trading volumes remained relatively low, at $10.5 billion, compared to $40 billion seen in March.
Is bitcoin Poised for More Gains?
Renewed institutional interest in bitcoin ETFs and the broader digital assets space has coincided with strong price recovery for the leading cryptocurrency. bitcoin's ability to firmly hold the $66,250 support level, with over 530,000 btc traded at this price, has given analysts confidence in the asset's potential for further gains.
x.com/ali_charts/status/1792479944586448945″ target=”_blank” rel=”nofollow”>According According to crypto analyst Ali Martinez, if the $66,000 support holds, bitcoin could see huge potential for further gains in the coming days, demonstrating the bullish sentiment surrounding the market's largest cryptocurrency.
However, while bitcoin has managed to recover above the crucial $66,000 level after the recent pullback, the leading cryptocurrency still faces a critical test as it attempts to break out of its established trading range.
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crypto analyst Rekt Capital has x.com/rektcapital/status/1792591437269172722″ target=”_blank” rel=”nofollow”>he pointed That even though bitcoin recorded a bullish flag breakout confirmation, the asset still needs to secure a daily close above $67,000 to continue its trend of higher highs and confirm the potential for further gains.
The analyst also x.com/rektcapital/status/1792548255537954937″ target=”_blank” rel=”nofollow”>Explain that bitcoin has been oscillating between its low and high range between $60,000 and $70,000 for more than two months, a natural consolidation process. As part of this, Rekt Capital believes that bitcoin should be able to reach the high of the $71,500 range again over time.
At the time of writing, btc is trading at $68,130, up a substantial 9% in the last week alone and over 8% in the last fourteen days.
Featured image from Shutterstock, chart from TradingView.com
