(Kitco News) – Bitcoin’s (BTC) price climbed above $67,000 in early trading on Friday as investors reduced their activity in the markets ahead of another round of Fed speakers, who are expected to provide further insight into the central banks thinking on interest rates.
San Francisco Fed President Mary Daly and Fed Governor Christopher Waller are scheduled to make speaking appearances, and the market is eagerly waiting to see if they will hold the line that the Fed intends to follow the data and wait for clear signs of cooling inflation before moving to lower interest rates.
For now, macroeconomic developments continue to drive the price action across all financial markets. The recent bullishness for cryptos and stocks came after April’s CPI print was cooler than expected at 0.3% month-on-month, compared to the market expectation of 0.4%.
“This has quelled rumors of a potential rate hike and paves the way for Powell to consider a rate cut in the coming months,” said analysts at Ryze Labs.
Focusing on Bitcoin, the return of inflows into spot BTC exchange-traded funds (ETF) has coincided with the move back above $65,000 as the arrival of institutions has excited traders and revitalized bulls.
“On May 15, total Bitcoin ETF inflows rose to $303 million, continuing the positive trend following the retail capitulation highlighted two weeks ago,” Ryze Labs analysts said. “Traditional firms have been accumulating Bitcoin ETF products.”
“Notably, the State of Wisconsin disclosed a nearly $100 million purchase of IBIT, Blackrock’s BTC spot ETF. Bitwise reported that 563 investment firms own $3.5 billion worth of Bitcoin ETFs, and estimates that over 700 firms will report holdings in this week’s 13F filing deadline. Millennium and Schonfeld filed investments of approximately 3% and 2% of their AUM into the BTC spot ETF, respectively,” they highlighted. “We remain optimistic that more sovereign funds and institutions will adopt Bitcoin as a reserve asset on their balance sheets.”
The price of Bitcoin has rallied higher as news reports of the various 13F filings circulated around the cryptosphere, and Friday’s price action shows King Crypto could be gearing up to make a run at establishing a new all-time high.
BTC/USD Chart by TradingView
At the time of writing, Bitcoin trades at $67,270, an increase of 2.08% on the 24-hour chart.
This cycle is different
“The crypto market sprung to life after several weeks of uncertain sideways movement. Several assets, including Bitcoin, witnessed bullish, solid action,” said Rachel Lin, CEO and co-founder of SynFutures. “As of this writing, BTC is up nearly 8% from last week, while SOL is up 12%, and TON is up 7%. Memecoins are once again witnessing strong buying, as DOGE is up by 5%, SHIB by 10%, and PEPE by a massive 26% compared to last week.”
“However, not all assets are performing as expected,” Lin Noted. “While BTC is up by 8%, ETH has barely moved. The same can be said for several other big assets like ADA, AVAX, TRX, and LINK. This divergence has been one of the main features of this crypto cycle. During the last cycle, we witnessed most assets moving in tandem; this time around, that has not happened.”
Lin said there are a variety of reasons for this and expects this divergence to continue throughout the bull market.
“The reason for this can vary. It could be due to the increasing user awareness about different projects, the ever-increasing market caps of altcoins, or even the fact that meme coins are now sucking up most of the liquidity that would have otherwise flowed from Bitcoin to altcoins,” she said. “Whatever the reason, it’s clear that this cycle will see certain coins outperforming others by a significant margin.”
When it comes to the outlook for Bitcoin moving forward, she said SynFutures “sees a strong bullish move after the failed breakdown from early May.”
“Not only is Bitcoin above the crucial support level, but it has even moved above the previous lower high of 65,500,” she noted. “Ideally, we should see Bitcoin break above 67,000 to end the lower-high-low-low pattern we have followed since March.”
“On the fundamentals side, the current market rally is most likely driven by macro news of lower inflation in the U.S.,” Lin concluded. “This is fueling speculation about a possible rate cut. Risk-on assets like crypto would likely perform very well if that happened.”
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