After enduring a significant 20% correction earlier this month that saw Bitcoin fall below $56,400 and increased outflows from the Bitcoin ETF market, the world's largest cryptocurrency has managed to stage a strong comeback. It broke the key resistance level of $66,000 and turned it into a new support area.
BTC bounces back as Bitcoin ETF inflows surge
The rise in the price of Bitcoin has been closely linked to renewed inflows into the US Bitcoin ETF market. Data Farside shows that spot Bitcoin ETFs had their best flow week in two months, with the US fund class collectively generating $948 million in net positive flows from May 13 to May 17.
Interestingly, the majority of these inflows, roughly 89%, occurred in the last three trading days of the week, which industry analysts and researchers like James Butterville of CoinShares attribute to the shift in investor sentiment following the release of the lower-than-expected index. Consumer price index (Consumer Price Index) on Wednesday. The butterfly said:
The inflows were an immediate response to the lower-than-expected CPI report, highlighting our view that Bitcoin prices have returned to interest rate expectations.
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Regionally, in In terms of the overall Bitcoin market, US-dominated inflows amount to $1,002 million, while Switzerland and Germany also saw small inflows of $27 million and $4.2 million, respectively.
It is worth mentioning that Grayscale bitcoin boxwhich has seen $16.6 billion in outflows since launching its first Bitcoin ETF in January, saw small inflows totaling $18 million.
In addition to Bitcoin ETFs, the space has seen investment products in digital assets Inflows For the second week in a row, a total of $932 million, according to CoinShares. However, trading volumes remained relatively low at $10.5 billion, compared to $40 billion in March.
Is Bitcoin poised for further gains?
The renewed institutional interest in Bitcoin ETFs and the broader digital asset space has coincided with strength Price recovery For the leading cryptocurrency. Bitcoin's ability to firmly hold the $66,250 support level, with over 530,000 BTC trading at that price, has given analysts confidence that the asset can post further gains.
According to For cryptocurrency analyst Ali Martinez, if the support at $66,000 holds, Bitcoin could see strong potential for further gains in the coming days, indicating the bullish sentiment surrounding the largest cryptocurrency on the market.
However, while Bitcoin managed to bounce back above the crucial $66,000 level after the recent pullback, the leading cryptocurrency still faces a crucial test as it attempts to break out of the established trading range.
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Cryptocurrency analyst Rekt Capital pointed out Although Bitcoin recorded confirmation of a bullish flag breakout, the asset still needs to secure a daily close above $67,000 to continue its trend towards higher highs and confirm the potential for further upside.
The analyst as well He explains Bitcoin has been oscillating between its low and high range between $60,000 and $70,000 for more than two months, which is a natural consolidation process. As part of this, Rekt Capital believes that Bitcoin should be able to revisit the high $71,500 range over time.
At the time of writing, Bitcoin is trading at $68,130, up a whopping 9% in the past week alone and over 8% in the past 14 days.
Featured image from Shutterstock, chart from TradingView.com