Bitcoin experienced a significant surge in price on May 20, reaching its highest point in 38 days at $71,954. This upward momentum can be attributed to several factors, including reactions to recent US macroeconomic indices and the potential approval of an Ethereum Exchange-Traded Fund (ETF) by the US Securities and Exchange Commission (SEC).
The bullish trend in Bitcoin’s price began after Bloomberg analysts reported that the SEC is likely to approve an Ethereum ETF. This news caused a 9% increase in Bitcoin’s price, from $66,859 to $71,934. The price then stabilized around the $71,000 mark.
Another contributing factor to the price rally is the accumulation of Bitcoin by investors. On-chain data shows a decrease in exchange reserves, indicating that more investors are choosing to hold their Bitcoin in long-term storage. This trend started shortly after the release of the US Consumer Price Index (CPI) data, which showed a decline in core inflation to 3.4% in April 2024.
Since the release of the CPI data on May 15, the total amount of Bitcoin deposited on exchanges and trading platforms has decreased from 1,946,808 BTC to 1,919,030 BTC. This withdrawal of 27,778 BTC, worth approximately $1.96 billion, from the available supply on exchanges suggests a bullish sentiment among holders and increases the likelihood of a price breakout.
With the decrease in exchange reserves and the potential approval of an Ethereum ETF, Bitcoin’s price is poised for another upward movement. If the SEC officially approves the ETF, there is a possibility of a breakout above $75,000 in the coming days. Additionally, data from IntoTheBlock shows that the majority of active Bitcoin holders are currently in profit, indicating a reluctance to sell until the SEC’s decision on the ETF is announced.
It is important to note that this article is for informational purposes only and should not be considered financial advice. Readers are advised to conduct their own research before making any investment decisions. The views expressed in this article are the author’s own and do not necessarily reflect the opinions of The Crypto Basic. The Crypto Basic is not liable for any financial losses incurred.