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Key reason why the price of Bitcoin did not exceed $70,000, indicated by Top Trader
Alex Dovbnja
This could be the main reason why Bitcoin price struggles to recover the $70,000 level
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According to trader Gert van Lagen, distributing coins acquired by long-term Bitcoin holders to new ETF holders is the solution fundamental reason because the leading cryptocurrency by market capitalization has yet to decisively surpass the $70,000 level.
In mid-May, van Lagen noted that the distribution of long-term to short-term Bitcoin holders was already in “full swing.” This hypothesis is based on recent on-chain data showing the rollover of coins held for more than 12 months.
“Parabolic” price discovery.
Van Lagen said previous deployments of this type initially led to “parabolic” price discoveries. These price discoveries would be followed by prolonged bear markets.
While Bitcoin has failed to gain a position above the crucial $70,000 level, the consensus seems to be that the ongoing bull run is far from over.
AS reported by U.TodayGalaxy Digital CEO Mike Novogratz predicted that the price of the bellwether cryptocurrency could potentially reach $100,000 by the end of the year if it manages to break out of the major resistance area around $73,000 in the near future.
Both Fundstrat co-founder Tom Lee and prominent commodities trader Peter Brandt see the price of Bitcoin potentially reaching a peak of $150,000 during this cycle.
Bitcoin ETFs are launching
US-based spot exchange traded funds (ETFs) have managed to record 19 days of consecutive inflows. AS reported by U.TodayOn Tuesday, these products recorded the second largest inflows ever ($880 million).
According to leading analyst Eric Balchunas, Bitcoin ETFs are proving impressive resistance capacity despite their volatile performance.
Throwing a spanner in the works
Despite very impressive ETF flows, the price of Bitcoin collapsed on Friday following the release of US jobs data. The number of jobs added in May was much higher than expected. The strength of the labor market will likely dissuade the US Federal Reserve from accelerating rate cuts. Such a scenario will not be beneficial for risky assets like Bitcoin.
About the author
Alex Dovbnja
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience covering everything related to the burgeoning industry, from price analysis to Blockchain disruption. Alex has authored more than 1,000 stories for U.Today, CryptoComes, and other fintech media. He is particularly interested in regulatory trends around the world that are shaping the future of digital assets; he can be contacted at alex.dovbnya@u.today.