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Why is the price of Bitcoin rising today? BTC heads for $75,000 ahead of Ethereum ETFs
Bitcoin price surged to $71,954 on May 20, its 38-day high, on-chain data trends highlight persistent reactions to recent US macroeconomic indexes and upcoming Ethereum ETF approval as key catalyst behind the rally.
Why is the price of Bitcoin (BTC) rising today?
Bitcoin price rose to a 38-day high of $71,954 on May 21, 2024, largely due to a report from Bloomberg analysts that the U.S. Securities and Exchange Commission will approve the Ethereum ETF.
After a volatile start to the month, Bitcoin price fell as low as $60,207 on May 11. But the cryptocurrency market has since turned bullish thanks to successive bullish whispers emerging from US regulators, ranging from Nonfarm Payrolls in the United Statesat the latest Consumer price index data (IPC).
From Bloomberg Senior ETF Analyst Eric Balchunas statement on Monday In the afternoon where ETH spot ETF approval odds are now 75%, Bitcoin price rose 9% from $66,859 to $71,934 before finding support around the $71,000 level at the time of writing of this article, on May 20th.
$1.8 billion drop in foreign exchange reserves could push BTC towards $75,000
Undoubtedly, the bullish stimuli resulting from the positive sentiment surrounding the Ethereum ETF approval is key to the latest wave of the BTC price rally.
However, on-chain data suggests a continuation of the bullish accumulation trend that began shortly after the last US CPI data release.
The CryptoQuant Exchange Reserves chart below shows the real-time changing balance of all bitcoins deposited into wallets hosted on the exchanges. The decline in foreign exchange reserves occurs when the majority of Bitcoin holders are bullish and choose to move their holdings into long-term deposits.
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On May 15, the US Bureau of Statistics announced that US core inflation fell to 3.4% in April 2024. The BTC foreign exchange reserves trend line (blue) above shows how Bitcoin investors’ reaction to the report accommodative US CPI may have contributed to the BTC price breakout of 9% in the last 48 hours.
Bitcoin investors held a total of 1,946,808 BTC as of May 15, when the colder-than-expected CPI data was released. But since then there has been a clear trend for investors to move large amounts of BTC into long-term deposits.
At the time of publication on May 21, the total bitcoin deposited on exchanges and trading platforms has dropped to 1,919,030 BTC. This implies that investors have removed 27,778 BTC (worth approximately $1.96 billion) from the supply of coins readily available to trade on exchanges.
When such a large number of coins are removed from market supply, this signals bullish sentiment among holders and also increases the chances of a price breakout, if it coincides with an increase in demand.
This partly explains why the price of BTC quickly jumped by 9% in just 12 hours, after Bloomberg analysts announced the likelihood of SEC approval of Ethereum ETFs.
Bitcoin price forecast: imminent breakout above $75,000?
The price of Bitcoin looks set to record another rise after the 9% surge recorded in the space of 24 hours. With BTC foreign exchange reserves still trending lower from last month’s low, there is a possibility that a positive official verdict from the SEC could trigger another breakout above $75,000 in the coming days.
Global incoming and outgoing monetary price data from IntoTheBlock also confirms this bullish position.
It shows that at current prices, 98.7% of all active Bitcoin holders are in profit. Therefore, most BTC traders may not be willing to sell, at least until the SEC verdict on Ethereum ETFs is expected before the May 23/24 deadline.
If this scenario holds, BTC will likely consolidate the $68,900 support level, where over 1.45 million investors had previously purchased over 954,500 BTC.
Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are encouraged to do thorough research before making any investment decisions. Crypto Basic is not responsible for any financial losses.
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