Crypto markets were volatile as investors continued to digest new inflation data and the Federal Reserve’s dot plot.
Bitpush data shows that Bitcoin bulls tried to push higher in early trading, but encountered resistance at $68,484. After midday, short forces prevailed and BTC fell to an intraday low of $66,206. At the time of writing, Bitcoin was trading at $66,844, down 2.5% in 24 hours.
Altcoins took a hit, with the top 200 tokens by market cap seeing more losses than gains.
Io.net (IO), which had the largest gain the day before, suffered the biggest drop on Thursday, falling 19.1%, followed by CurveDAO Token (CRV) with a 19% drop and Arweave (AR) with a 13.4% drop. Among the few rising tokens, Aelf (ELF) led the gains, up 7%, followed by SKALE (SKL) with a 6.5% increase and Toncoin (TON) with a 4.1% increase.
The current overall market value of cryptocurrencies is $2.42 trillion, and Bitcoin’s market share is 54.2%.
As for U.S. stocks, as of the close of the day, the Dow Jones Industrial Average initially closed down 0.17%, the S&P 500 rose 0.2%, and the Nasdaq rose 0.3%. The latter two set new closing highs for four consecutive trading days. Nvidia (NVDA.O) rose 3.5%, Apple (AAPL.O) rose 0.5%, and Tesla (TSLA.O) rose 2.9%.
Thursday's May producer price index showed prices fell 0.2% month-on-month after rising 0.5% in April, suggesting some easing in inflation, giving investors more reason to expect a rate cut in September. The CME Fed Watch tool currently shows a 68.5% chance of a rate cut, up from 65% yesterday.
The market needs a new narrative to stimulate demand
Analyst Skew analyzed the current buy and sell orders on the exchange on the X platform.
In terms of BTC spot, from a liquidity perspective, bid depth is between $66,000 and $65,000, but the market needs to find trading demand to support $66,000. There is quite a lot of ask depth around $70,000 and above, and the market may need some new narratives to stimulate demand.
Looking at the BTC perpetual contract, the Perp order book is quite active, with a large number of buys with low liquidity, which is usually a combination of actual demand and a large number of shorts seeking to close their positions.
Comparing BTC Binance Perp and Bybit Perp, the perpetual contract market shows a clear hedging pattern, and short positions are currently favored. However, the good news is that the funding rate is low and the spot premium lasts longer, which means that the bubble is leaving the market.
“With the U.S. stock market hitting new all-time highs, it is expected that Bitcoin may soon follow suit. However, we should be prepared for short-term resistance around $70,000, while greater resistance lies at $72,000,” analysts at Secure Digital Markets said.
$100,000 Bitcoin is only a matter of time
Although Bitcoin’s price action has been trading sideways since late February, many analysts say it’s only a matter of time before the uptrend resumes, with most predicting that Bitcoin will eventually break through $100,000 at some point in this bull cycle.
“In theory, by the end of this year, the price of Bitcoin should be close to $100,000, maybe even $90,000,” analyst and mathematician Fred Krüeger said on his podcast. “But the price of Bitcoin could go two standard deviations above these levels, which would take us to about $200,000 this year, or even $400,000.”
He added: “If we look at another year, by 2025, we could be at that $140,000 trend line, and if we can get one or two standard deviations above that number, we could be at $600,000, which would be a significant move.”
Krüeger said he thinks “there’s a real chance we could see highs around $500,000 to $600,000 this cycle.”
Market analyst CryptoCon is slightly less bullish on the cycle market top, with a “Level 3” price target of $91,539 and a cycle top target of $123,832, though he notes that the cycle top target is rising.
Analyst Rekt Capital explains on X Platform why sideways price action is actually a good thing.
He tweeted: “The fact that Bitcoin is having a hard time breaking out is positive for the overall cycle. Bitcoin has never broken out so early after a halving. If it does break out, the cycle will accelerate to the point where the bull run will be shorter than usual.”
“This continued consolidation allows the price to resynchronize with the historical halving cycle so that we can achieve a normal bull run,” Rekt Capital said.
Bitcoin has been consolidating in this re-accumulation range for three months. History suggests this could continue for another three months. Therefore, it would not be surprising if the price turned down from the range high resistance.”