On May 16, after the publication of macro data in the United States, the first cryptocurrency broke the $66,000 mark, adding almost 7% per day. ForkLog talks about the state of the market and shares the opinions of the interviewed experts.
At the time of writing, bitcoin is trading at $66,240, and its capitalization is $1.3 trillion with a dominance index of 56.11%.
The 15-minute BTC/USDT chart of the Binance exchange. Data: TradingView.Other cryptocurrencies from the top 10 entered the "green zone", with the exception of BNB (-2.9%).
Data: CoinGecko.Ethereum also broke the $3,000 mark, almost completely repeating the dynamics of digital gold.
According to Coinglass, over the past day, the volume of liquidations in the market amounted to $146 million — $108 million fell on short positions.
Liquidation card. Data: Coinglass.CryptoQuant analysts drew attention to the upcoming surge in liquidity due to the influx of "stable coins".
Incoming Liquidity Surge
“Stablecoin inflows suggest a substantial increase in liquidity entering the market, which can affect #Bitcoin's supply and demand dynamics and potentially lead to increased price volatility.” – @Woo_Minkyu
Link 👇https://t.co/re2rTMytuf
"The influx of stablecoins implies a significant increase in liquidity entering the market, which can affect the dynamics of supply and demand of bitcoin and potentially lead to an increase in price volatility," the publication says.
Expert opinion
Trader Artem Zvezdin said that the effect of halving bitcoin has already started to work:
"At the moment, the correction has ended, and we can expect further growth of the first cryptocurrency already due to a decrease in supply due to the halving of the reward for miners."
According to him, the market downturn was caused by the triggering of the classic trading strategy "buy on rumors, sell on facts", which investors implemented after halving.
Vladimir Cohen, a trader and author of the Coenplus Telegram channel, drew attention to the fact that for more than a month bitcoin has been trading in a wide range from $58,000 to $67,000. According to his observations, in May, the dynamics of the coin "clearly coincided with the [publication] of data in the United States."
During the month, there was a strong decrease in forecasts of an increase in inflation from the University of Michigan and a sharp increase after the release of consumer inflation indicators, the source stressed.
"An interesting trend has emerged: after five days of growth, six to eight days of decline follow, during which optimism in the crypto market drops sharply. However, this year, when the fear and greed index turns out to be at minimum values, there is a rapid increase in certain news," Cohen noted the pattern.
Among the positive factors, he also highlighted the resumption of inflows into spot bitcoin ETFs and the decline in the dollar index.
Dynamics of spot Bitcoin ETFs. Data: SoSoValue.Zvezdin noted that digital gold primarily reacts to positive signals, and only then other cryptocurrencies.
"Demand is flowing from bitcoin to altcoins, and nothing is changing here. While it is not overbought, good growth in altcoins is not expected. But when the asset approaches the $80,000 mark, we will probably see the confident dynamics of Ethereum," the expert added.
Cohen pointed to a decrease in global interest in the first cryptocurrency, as evidenced by the minimum values of new addresses and transactions on the network.
It is important for Bitcoin to close this week above the $66,000 level, the expert believes. This will give the potential for its further growth, but in the range of $69,000-72,000, there is still "a huge volume of supply."
Cohen clarified that without additional drivers and an influx of liquidity, the asset has little chance of rising above $70,000.
"The bullish trend is in force. It's just that bitcoin has been growing too fast and now there is a natural correction," he noted.
According to Cohen, Ethereum, in turn, is "influenced by rumors" about its recognition as an SEC security. Negative pressure on the coin is also exerted by the low chances of spot ETH-ETFs appearing in May and its increased issue, the speaker stressed.
"About 80% of the major holders of Ethereum are in the black and are gradually selling off stocks. If the ether fails to gain a foothold above the $3,200 level this week, the decline will continue. Demand from major players is in the range of $2,300—2,600," Cohen summed up.
Earlier, Standard Chartered analysts announced that bitcoin had reached the bottom as part of the correction, confirming the target of $150,000 at the end of the year and $200,000 by the end of 2025.
Recall that the ex-CEO of BitMEX, Arthur Hayes, allowed the digital gold quotes to overcome the $60,000 level and move to $ 70,000 by the end of August.
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