Bitcoin has recently risen above the $70,000 mark for the first time in six weeks. Technical analysis and market indicators suggest there are four key reasons why Bitcoin was a strong buy below $70,000.
Bitcoin Funding Rates Rise to 6-Week Highs
Bitcoin rose to a six-week high of $71,401 on May 20, a price level not seen since April 9, according to TradingView. As Bitcoin recovered above the $70,000 psychological mark, the funding rate has also started rising. Bitcoin’s funding rate rose to 0.00187, the highest level since April 9, according to Coinglass, suggesting that most traders are long BTC.
Before Bitcoin’s rally to $70,000, funding rates have stayed below the 0.001 mark for the past month, suggesting that Bitcoin buyers are becoming more confident.
BTC Price Technicals Favor More Upside
Fueling investor confidence, the 4-hour Bitcoin chart has recently printed an inverse head and shoulder pattern used by traders to identify a trend reversal from bearish to bullish.
Popular crypto analyst Moustache wrote that inverse head and shoulders patterns should never be faded, as altcoins will follow Bitcoin’s lead.
Bitcoin Chart Fractal Mirrors 2017
From a fractal analysis perspective, Bitcoin’s current rally on the weekly chart looks similar to its rally in November 2021 when BTC rose from $31,000 in July to $69,000 in November. If chart patterns were to repeat, Bitcoin could have more upside momentum in the coming weeks.
Moreover, Bitcoin’s price trajectory is also similar to the 2017 bull run according to popular crypto analyst Jelle. Bitcoin appears to be following the same route as 2017’s bull run after overcoming turbulence around previous cycle highs.
Bitcoin ETF Flows Turn Positive
Additionally, institutional inflows into United States spot Bitcoin exchange-traded funds (ETFs) saw two consecutive weeks of positive inflows after three weeks of net negative outflows.
On May 20, Bitcoin ETFs saw positive inflows worth over $235 million, more than the net inflows of the previous week, according to Farside Investors data.
Institutional inflows from ETFs were a significant part of the current Bitcoin rally to new all-time highs. By Feb 15, Bitcoin ETFs accounted for about 75% of new investment in the world’s largest cryptocurrency as it surpassed the $50,000 mark.
Conclusion
Technical analysis, on-chain data, and institutional flows all suggest Bitcoin has room for more upside after breaking above $70,000. Key levels to watch include the all-time high near $69,000 and the psychologically important $100,000 mark.
