Bitcoin Gains 6.6%, Breaks Above $70,000 Level as Spot Buying, ETF Inflows Drive Momentum

Bitcoin Gains 6.6%, Pushes Above $70,000 as Spot Purchases and ETF Inflows Increase Momentum

Bitcoin (BTC) rallied strongly, breaking the coveted $70,000 mark to reach $71,785 as spot buying and increased interest in spot Bitcoin exchange-traded funds (ETFs) added to the bullish momentum.

While some analysts suggest that certain indicators show the best patterns of the market, the majority of on-chain indicators point to the existence of a nascent bull market. The recent support bounce near $60,000 has caused increased interest; Farside Investors reported inflows of nearly $950 million last week, a level not seen since March.

Bitcoin’s 51% gain to date is in line with investors’ expectations for US monetary expansion. The M2 monetary base in the United States exceeded $21.0 trillion in April 2024; This points to rising inflationary pressures despite some hesitation in spending by individuals and companies. The strategies the Federal Reserve uses to manage inflation and prevent recessions can impact the liquidity and attractiveness of scarce assets like Bitcoin.

According to CryptoQuant data, BTC reserves on exchanges reached their lowest level in seven years, further strengthening the bullish sentiment. As of May 19, only 1,918,417 BTC were available on major trading platforms; This is a significant decrease compared to the previous year. This scarcity, combined with the recent halving event that reduced potential new supply from miners, makes it increasingly difficult to justify a bearish sentiment towards Bitcoin.