(Kitco News) – Bitcoin’s (BTC) price is back on the move higher in early trading on Monday after holding steady near support at $61,000 over the weekend following Friday’s 5.15% dip to support at $60,000.
Little changed in the overall picture for the crypto market, however, as King Crypto remains stuck in the range it has been trading in since first surpassing $60,000 on February 28, prior to the Bitcoin halving.
BTC/USD Chart by TradingView
At the time of writing, Bitcoin trades at $63,215, an increase of 2.45% on the 24-hour chart.
“Bitcoin has oscillated between $56,000 and $74,000 since March, and the anticipated surge following April's halving event failed to materialize due to a scarcity of market drivers,” said analysts at Secure Digital Markets. “The market's behavior is marked by consistent lower lows and lower highs, indicating that investors are capitalizing on any price rallies to offload their holdings.”
“After dipping to Friday’s lows, Bitcoin rebounded over 5%,” they added. “Liquidations have been minimal, setting a solid foundation for future upward movements. The breakout of $65,000 might confirm the breakout of the inverted Head-and-Shoulders pattern on the 4H timeframe which could imply major bullish implications potentially sending prices to record highs.”
Exchange-traded fund (ETF) flows continue to be a headwind for Bitcoin as “there has been a notable $84.7 million in outflows, primarily driven by Grayscale, which saw its largest withdrawals since May 1st, totaling $103 million,” the analysts said. “ETF inflows have diminished recently, contributing to the prevailing bearish mood.”
One sector of the market that has started to show the effects of the halving is the Bitcoin mining difficulty, which saw its biggest decline in a year and a half as miners have been forced to shut down unprofitable equipment.
“The mining difficulty for Bitcoin decreased by approximately 6% last week, the steepest drop since the cryptocurrency's low point in December 2022,” the analysts noted. “This reduction is potentially beneficial for some miners, as the decreased Bitcoin value and doubled costs post-halving have forced the shutdown of pricier mining equipment, thus lowering the overall hashrate. However, miners with the lowest operational costs have gained a larger market share since the halving.”
“The decrease in mining difficulty presents an advantageous scenario for existing miners, potentially stabilising the network's hash power and reducing the urgency to sell mined Bitcoin to cover operational costs,” said analysts at Bitfinex. “This shift is complemented by the steadfastness of long-term holders, whose reluctance to sell not only buffers the market against fluctuations driven by short-term profit-taking but also signals collective confidence in Bitcoin's enduring value.”
“If this trend persists, then we might be able to soon conclude that the bottom is already in and upside growth potential has increased,” they added. “The recent volatility in daily net flows into the US Bitcoin ETFs also suggests that there is mixed investor sentiment, indicative of a near-term floor for the price being reached.”
Looking at the broader financial landscape, stocks opened higher on Monday ahead of a key week for inflation data, but have fallen under pressure at the time of writing, with the S&P and Dow now flat on the day while the Nasdaq is up 0.27%.
“This week's key focus will be the consumer price index (CPI) report set for release on Wednesday, crucial for assessing the Federal Reserve's future monetary policy,” said analysts at Secure Digital Markets. “Despite recent higher-than-expected inflation figures, traders are optimistic that the Fed will hold off on increasing rates.”
“The April CPI will be pivotal in determining if the stock market can maintain its stability after an unexpectedly robust first-quarter earnings period,” they added. “As of this past Friday, 92% of S&P 500 companies have reported earnings, with nearly 80% surpassing expectations, bolstering market resilience amidst ongoing inflation concerns.”
According to market analyst Rekt Capital, history suggests that the May 1 dip to $56,000 was the bottom of this current cycle, and soon, Bitcoin will start to trend higher.
#BTC
If $56,000 was not the bottom then this current pullback will have officially equalled the longest retrace in this cycle at 63 days
History however suggests that this current pullback ended at $56000 and 47 days$BTC #Crypto #Bitcoin pic.twitter.com/OfumXZ1qHi— Rekt Capital (@rektcapital) May 13, 2024
