To The Moon

$CME Bitcoin - main 2405(BTCmain)$ surged past the $70,000 mark on 21 May, marking a significant milestone driven by a flood of investment into spot Bitcoin exchange-traded funds (ETFs) and a broader market rally.

Bitcoin’s price climbed to $70,325, a 6% increase over 24 hours, and at time of this writing, Bitcoin is trading at above $70,900.

Ethereum (ETH) arguably led the rally over the past couple of hours — experiencing a staggering 14.5% rise within an hour on Monday amid speculation that the US SEC might approve spot Ethereum ETFs.

ETH climbed from $3,143 to above $3,600 at time of this writing.

Bitcoin ETFs Saw Renewed interest

Bitcoin ETFs after weeks of outflows finally saw renewed interest, with nearly $1 billion flowing into these funds, providing investors with exposure to the leading digital asset.

The surge has led to significant liquidations in the market, with over $235 million in positions closed in the past 24 hours, including $63 million in Bitcoin short positions alone.

Beginning of A Bull Market Suggested

If we looked at most on-chain metrics, we would notice that they suggest the beginning of a bull market despite some showing signs of potential peaking. The recent bounce near $60,000 has sparked renewed interest, with Farside Investors reporting approximately $950 million in inflows last week, a level not seen since March.

Bitcoin’s 51% year-to-date gain reflects investors’ anticipation of US monetary expansion, evidenced by the M2 monetary base surpassing $21 trillion in April 2024. This increase in circulating money suggests rising inflationary pressures despite a period of company and individual spending hesitancy.

We can see that the transaction on Bitcoin network on daily, 7DMA, it has been staying above 300K level since beginning of May 2024.

Meanwhile, the Federal Reserve’s efforts to manage inflation and avoid a recession could affect liquidity and the attractiveness of assets like Bitcoin.

Scarcity Due To Recent Halving

Bitcoin reached a new all-time high of $73,737 in March and is now just 5% below that level. The recent run appears to be largely driven by the new Bitcoin ETFs, which trade on traditional stock exchanges and allow investors to buy shares that track the price of the asset.

Supporting the bullish sentiment, Bitcoin reserves on major exchanges have dropped to a seven-year low. Data from CryptoQuant shows only 1,916,768.72 BTC available on major trading platforms as of time of this writing, a significant decrease from the previous year.

As the exchange reserve continues to fall, it indicates lower selling pressure. This scarcity, coupled with the recent halving event that reduced the potential new supply from miners, makes a bearish outlook on Bitcoin increasingly difficult to justify.

The crypto community continues to watch closely as Bitcoin’s price action unfolds, with many wondering whether the digital asset will continue its ascent or face a significant correction in the coming weeks.

Summary

I personally think that the scarcity of BTC on exchanges and also investors are looking for some other assets to provide liquidity to their funds. This could help to push the BTC prices higher.

Ethereum Spot ETF would further catalyse the rally, I hope. So how do we take advantage of this?

You can start looking at crypto miner stock like $Marathon Digital Holdings Inc(MARA)$ . Bitcoin Spot ETF $iShares Bitcoin Trust(IBIT)$

Appreciate if you could share your thoughts in the comment section whether you think Bitcoin would stage a rally after Ethereum Spot ETF comes onboard?

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.