Fresh Wave of Demand for Bitcoin (BTC) Could Spark New Rally

Bitcoin rose above $71,000 this week, breaking out of a tight trading range in which it had been confined for several weeks. One of the main catalysts for this price movement is strong demand through ETFs, with net inflows of around $1.2 billion over the past week.

Going forward, several key factors point to the possibility of building a new wave of demand for Bitcoin.

A new wave of demand for Bitcoin

As pointed out by the latest CryptoQuant analysisOver the past week alone, these ETFs saw approximately $1.2 billion in net new inflows, reflecting increased buyer interest in gaining exposure to assets through these investment vehicles. These massive capital inflows into spot Bitcoin ETFs have provided a major boost to the price of the leading cryptocurrency after a period of relative stagnation.

The recent rise in the price of BTC has allowed short-term investors who recently purchased the asset to be in a profitable position once again. Such renewed profitability reduces the risk of a break in investor sentiment and a reversal from an uptrend to a downtrend.

CryptoQuant still sees a consolidation period in the $60,000 to $70,000 range as making the most sense in the near term. There are no major positive economic factors currently in effect that would result in a massive influx of new capital and push Bitcoin to significant price spikes as has happened in past bull cycles.

This week will be light on major economic data releases, which is positive given the current upbeat mood following the latest US inflation numbers. However, if the upcoming economic reports are disappointing and risk appetite weakens, this could lead to a decline in the Bitcoin price towards the $60,000 level.

While concerns about Bitcoin's return to consolidation persist, the report also highlights emerging signs that the next major rally could begin sooner than expected.

The market is already seeing a rebound due to speculation regarding the approval of an Ethereum spot ETF which has pushed the collective market capitalization past $2.55 trillion.

“Outlook: Despite my base scenario of consolidation, there are signs of a new wave of demand emerging. There is an increasing possibility that the next rally will begin sooner than expected.”

Bitcoin make or break zone

Famous cryptocurrency analyst Ali Martinez She suggests Very “minimal resistance” is within the $70,180 to $70,600 price range. More than 450,000 Bitcoin addresses bought about 273,000 BTC in this range, creating a supply zone.

If Bitcoin can reach the $70,180 to $70,600 area, the path of least resistance points to the upside. But if selling pressure stops the rally in this range, it could temporarily cap the uptrend.