Article Summary:
Last week, BTC continued its rebound trend, reaching a low of $66,060 and a high of $71,979, close to the all-time high in March. The rebound was mainly driven by the limited approval of the SEC for the ETH spot ETF. Despite the approval and listing still being 1-2 months away, the clear regulatory policies and positive stance of the US government towards the cryptocurrency industry have created a favorable macro climate. The US stock market is also experiencing high volatility similar to BTC, with the Dow Jones index showing weakness and the Nasdaq showing strength. As the expectation for ETH ETF grows, capital may shift from BTC to ETH, leading to a 20% rebound in the ETH/BTC trading pair and a fourfold increase in trading volume. The Federal Reserve’s monetary policy decisions continue to affect BTC, and this will be the underlying tone of the market until interest rate cuts are confirmed, which may last for another 2 months.
Supply and demand structure:
The current bull market has similarities with the trajectory of 2017, with slow upward movements and several periods of consolidation at high levels. This provides strong support for future price increases. Based on on-chain data, the $60,000-$73,000 range has become the accumulation zone for BTC, with approximately 3 million coins accumulated. Additionally, $66,000 has become the largest accumulation zone with 546,000 coins. This has potentially formed a support zone for the new market cycle. In the US ETF market, there have been net inflows for the past 2 weeks, with a net inflow of $946 million last week, reaching a total of $1.055 billion. The inflow of stablecoins, which are indicators of long-term market liquidity, slightly decreased by $30 million last week, mainly due to the outflow of USDC. On the other hand, USDT saw a net inflow of $606 million. As of May 26th, centralized exchanges held 2.329 million BTC, an increase of 12,000 coins from the previous week, indicating a slight increase in short-term supply. With the continuous rebound in prices, short-term investors who have held BTC for less than 5 months have seen their on-chain profits rise to 12%, a relatively moderate profit in the bull market cycle. BTC has shown significant non-correlation with 18 global asset classes, including US stocks, oil, and gold, but has a strong negative correlation with the US dollar. Until the expectation of a US interest rate cut strengthens, the overall market is still in a dynamic equilibrium of an upward trend. However, the approval of the ETH ETF and the competition for US cryptocurrency investors due to the US presidential election are gradually unfolding. It is important to constantly revisit the original purpose of BTC, which is to counter the overissuance of central currencies. In the face of the expanding US dollar and bond system, a short wait is worthwhile.
EMC BTC Cycle indicator:
With the recovery of market price indicators and long-short hand indicators, the EMC BTC Cycle engine shows that our bull market acceleration period has risen from a low of 0.37 to 0.63.
EMC Labs was founded in April 2023 by cryptocurrency investors and data scientists. It focuses on blockchain industry research and crypto secondary market investments, using forward-thinking insights and data mining as its core competitive advantage. EMC Labs is committed to participating in the thriving blockchain industry through research and investment, and strives to promote the well-being of humanity through blockchain and cryptocurrency assets.
For more information, visit: https://www.emc.fund
