On Wednesday (June 5), Bitcoin reversed and surged, successfully standing back above $70,000, challenging the historical peak again. The unexpected "explosion" of the US JOLTS was lower than expected, and the US manufacturing PMI showed economic contraction, which boosted the pricing of dovish rate cuts and stimulated risk assets such as Bitcoin and stocks to explore higher.

Most cryptocurrencies rose on Tuesday, boosted by optimism about global economic developments and the prospect of further regulatory approvals for exchange-traded funds in the near future.

According to the CoinShares platform, Bitcoin ETFs attracted $148 million in net liquidity last week, while Ethereum attracted $33.5 million.

Cryptocurrency platform Bitfinex said Bitcoin’s decline since March was driven by long-term holders dumping their coins on the market, a trend that is now coming to an end.

Earlier data from the United States showed that the manufacturing PMI in May fell to 48.7 from 49.2 in April, falling into a deep contraction.

Markets expect the Fed to keep interest rates unchanged in June and July and possibly cut them in September and November, according to CME's Fed Watch tool.

The U.S. JOLTS report showed a decrease in job openings in April, which unnerved the market. Data released by the Bureau of Labor Statistics on Tuesday showed that the number of job openings in April was 8.059 million, lower than the expected 8.34 million and the revised 8.35 million in March.

Bitcoin Technical Analysis

FXStreet analyst Michael Ebiekutan said that according to the Glassnode key indicator, most long-term Bitcoin holders are holding a large amount of unrealized profits.

First, Bitcoin’s coin age metric shows that coins less than three months old account for 41% of the network’s wealth. Coin age indicates how long a coin has been held at a certain address, which helps measure the percentage of liquidity distribution between short-term and long-term holders.

While old coins less than 3 months old account for 41%, indicating that the percentage of liquidity held by new demand is starting to grow, at historical bull market highs this ratio would typically exceed 70%, which "suggests that relatively little supply is being spent and sold by long-term investors."

Another key age component is single-cycle holders (coins held for 6 months to 3 years), and according to Glassnode, all members of this group began holding large unrealized profits after the Bitcoin price broke through the $40,000 area, but began selling after Bitcoin rallied to its all-time high of $73,000.

“We can expect that the incentive for this group to sell more supply will increase if prices rise and further increase their unrealized profits,” Glassnode analysts noted.

In addition, long-term holders (LTH) made profits accounting for more than 85%, while losses accounted for only 0.3%, suggesting that this may still be the beginning of the mania phase. At the top of the mania phase, LTH holdings fell sharply after a large amount of profit-taking, as shown in the figure below.

Despite the huge unrealized profits, the seller risk ratio is at a low level compared to the new highs in previous cycles.

The sell-side risk ratio measures absolute realized profits and losses relative to their realized capital, with higher ratios meaning investors are spending more on profits/losses, while lower ratios indicate that most tokens are spending closer to their breakeven prices.

Glassnode said the low sell-side risk ratio “suggests that this group is waiting for higher prices before increasing distribution pressure.”

Nonetheless, according to CryptoQuant data, Bitcoin’s net exchange flow was -7,883 BTC, consistent with the corresponding price increase. However, if Bitcoin rises to around $72,000, there may be temporary profit-taking, as more than 150,000 BTC will be profitable around that price.

In addition, Galaxy Digital CEO Mike Novogratz believes that the risk of Bitcoin is tilted upward, and if it breaks through the historical high of $73,000 around next week, the price of Bitcoin may reach $100,000 by the end of this year. He mentioned that clearer regulation and the Senate's possible approval of the FIT21 bill may become the main catalyst for attracting more well-known traditional players into the ecosystem, thereby pushing up the price of Bitcoin.

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