The release of U.S. inflation data has ignited a surge in risky asset purchases, with crypto assets at the forefront. Following a period of prolonged consolidation, this influx of buying activity has injected substantial volatility into the market. Over the past 24 hours, the crypto market’s total capitalization has increased by 5.3%, reaching $2.39 trillion, the highest level in ten days. More significantly, this upward movement has enabled the market to break through the resistance of the descending range, positioning it to test previous highs. The market’s performance on Thursday and Friday will be crucial in confirming a bullish bias. If the momentum continues, this breakthrough could pave the way towards the highs observed in March, when the total market capitalization surpassed $2.75 trillion. This potential rally highlights the market’s renewed vigour and the possibility of a sustained upward trend, contingent on continued investor confidence and favourable macroeconomic conditions.
Between May 15th and May 16th, BTC surged by 8.4%, peaking at $66,750, its highest level in three weeks. Despite stabilizing near $65,000, this price movement signifies a reversal after Bitcoin retested the $57,000 support level on May 1. However, these gains have not been sufficient to spark bullish sentiment, as indicated by Bitcoin derivatives metrics. Investor disappointment partly stems from the strong performance of traditional assets. On May 16, the S&P 500 index reached an all-time high, achieving a 6% gain over 15 days. Simultaneously, gold appreciated by 4% during the same period, currently trading at $2,375, just under 1% below its highest closing price ever. For Bitcoin to reclaim its highest closing price of $73,084, it needs to rally an additional 12%. This prospect seems unlikely, given that the primary price driver—spot Bitcoin exchange-traded fund (ETF) inflows—has waned. Although these ETFs have attracted $12.1 billion in investments since their January launch, inflows have stagnated over the past two months.
Ethereum (ETH) is poised for a potential short-term bull run on Wednesday, following a breakout from a five-day horizontal consolidation phase. This movement has garnered significant attention, particularly in light of reduced revenue on the ETH Mainnet and ongoing debates within the crypto community regarding the Securities and Exchange Commission’s (SEC) potential decision on spot ETFs. Throughout the trading day, Ethereum’s price demonstrated notable volatility, oscillating between $2,888.34 and $3,040.59. This fluctuation underscores the market’s uncertainty and anticipation surrounding Ethereum’s next move. The current price volatility reflects the market’s response to these developments. A successful short-term bull run would require sustained buying pressure and positive sentiment, especially if the SEC’s decision on ETH ETFs turns out to be favourable. Traders and investors are closely monitoring these factors, as they could set the stage for Ethereum’s next major price movement.
The increasingly stringent regulatory environment, particularly in the U.S., likely explains why investors are cautious about using derivatives to buy Bitcoin despite its recent price gains. On May 6, U.S. Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam cautioned that additional enforcement actions against the crypto sector are anticipated over the next six months to two years. Moreover, U.S. regulators have multiple pending cases against prominent crypto firms, including Binance, Coinbase, and Kraken. Recent enforcement actions targeting privacy-focused services and broker-dealers like Robinhood have further exacerbated the uncertainty. The absence of a clear legislative framework and jurisdictional clarity significantly dampens the enthusiasm of Bitcoin investors, as they remain wary of potential regulatory repercussions. This regulatory ambiguity continues to hinder broader adoption and investment in Bitcoin derivatives, as investors seek stability and predictability in the market.
Technical Outlook:
Bitcoin:
BITCOIN witnessed a sharp correction after making a new all-time high of $73,777 and the prices fell almost by 23.35% and dropped to $56,552. Though the asset broke the psychological level of $60k it did not give a weekly closing below $60,000 as it took support at the key level of $56,000 and rallied up to $66,744. Post this move, BTC is consolidating and trading in a range from $67,000 to $60,000. The asset has a strong resistance at $67,500 and $73,777 whereas $60,000 and $56,000 will act as a strong support for the asset.
Ethereum:
ETH after making the recent high of $4,093 witnessed a sharp correction and the prices fell almost by 31% and dropped to $2,817. The asset is trading in an ‘Ascending Triangle’ pattern and is taking multiple support at $2,850. Once ETH gives a breakout above the descending trendline of the pattern then we may expect the bulls to resume the up move whereas if it breaks the horizontal trendline of $2,850 then we may see further downfall.
Binance Coin:
BNB after making the recent high of $645 witnessed a sharp correction and the prices fell almost by 23% and dropped to $495.8. The asset took support at the key level of $500 and rallied up to $634. The bulls, however, failed to manage their grip on the asset and couldn’t break the recent high of $645 and the prices saw another dip to $508. Currently, BNB is taking good support at $500 and is training in a range from $550 to $600 with low volumes. Breakouts on either side of the range with good volumes will further decide the trend for the asset.
Weekly Snapshot:
| USD ($) | 09 May 24 | 16 May 24 | Previous Week | Current Week | |||
| Close | Close | % Change | High | Low | High | Low | |
| BTC | $63,050 | $65,232 | 3.46% | $65,494 | $58,848 | $66,712 | $60,208 |
| ETH | $3,036 | $2,945 | -3.00% | $3,220 | $2,938 | $3,053 | $2,864 |
| BNB | $596.00 | $569.00 | -4.53% | $602.59 | $559.45 | $599.18 | $561.13 |
| Crypto | 1w – % Vol. Change (Global) |
|---|---|
| Bitcoin (BTC) | 2.61% |
| Ethereum (ETH) | 1.49% |
| Binance Coin (BNB) | 35.10% |
| Resistance 2 | $73,777 | $3,750 | $1.25 | $650 |
|---|---|---|---|---|
| Resistance 1 | $67,500 | $3,350 | $1 | $600 |
| USD | BTC | ETH | Matic | BNB |
| Support 1 | $60,000 | $2,850 | $0.75 | $550 |
| Support 2 | $56,000 | $2,550 | $0.5 | $500 |
Market Updates:
- The United States Senate has passed a joint resolution calling on the SEC to reverse a rule impacting financial institutions doing business with digital asset firms.
- The world’s largest settlement system, the Depository Trust and Clearing Corporation (DTCC), and blockchain oracle Chainlink have wrapped up a pilot program with several major banking firms in the United States aimed at increasing traditional finance fund tokenization.
- Over the past week, more than 600 firms have revealed significant investments in spot Bitcoin exchange-traded funds (ETFs) in their 13F filings with the United States Securities and Exchange Commission (SEC).
