Bitcoin has surged past the $70,000 mark for the first time in six weeks, prompting traders to consider why they should have bought the dip below this level. According to TradingView, Bitcoin reached a six-week high of $71,401 on May 20, a price level that hasn’t been seen since April 9. As Bitcoin recovered above the psychological mark of $70,000, the funding rate has also started rising. Coinglass reported that Bitcoin’s funding rate rose to 0.0187%, the highest level since April 9, indicating that most traders are long on BTC.
A positive funding rate suggests that traders are using leverage to take long positions on Bitcoin. Prior to Bitcoin’s rally to $70,000, funding rates had remained below the 0.01% mark for the past month, which suggests that Bitcoin buyers are growing more confident. The technical analysis of Bitcoin’s price also favors further upside. The four-hour Bitcoin chart recently showed an inverse head-and-shoulders pattern, which is often seen as a sign of a trend reversal from bearish to bullish. This pattern, according to popular crypto analyst Moustache, could indicate more upward momentum for Bitcoin.
Fractals, which are technical chart patterns that repeat on multiple timeframes and charts, also support the idea of Bitcoin’s rally continuing. From a fractal analysis perspective, Bitcoin’s current rally on the weekly chart looks similar to its rally in November 2021, when BTC rose from $31,000 in July to $69,000 in November. If history were to repeat itself, Bitcoin could experience more upside momentum in the coming weeks. Furthermore, Bitcoin’s price trajectory is reminiscent of the 2017 bull run, according to another popular crypto analyst named Jelle.
Institutional inflows into United States’ spot Bitcoin exchange-traded funds (ETFs) have also turned positive after three weeks of net negative outflows. According to Dune, U.S. Bitcoin ETFs accumulated over $200 million worth of Bitcoin in the previous week and over $413 million during the week of May 6. On May 20, Bitcoin ETFs saw positive inflows worth over $235 million, surpassing the net inflows of the previous week, according to data from Farside Investors. Institutional inflows from ETFs have played a significant role in the current Bitcoin rally to new all-time highs.
It’s important to note that this article does not provide investment advice or recommendations. Readers should conduct their own research and make informed decisions when it comes to investing and trading.