The cryptocurrency market was in consolidation mode on Tuesday, with Bitcoin continuing to hold above $63,000 while most altcoins saw small losses.
According to Bitpush data, the trading price of Bitcoin on Tuesday ranged from $62,815 to $64,445, with both long and short sides evenly matched. As of writing, BTC is trading at $63,010, down 0.5% in 24 hours.
Among altcoins, most of the top 200 coins by market cap are in a downtrend. AIOZ Network (AIOZ) and Jito (JTO) led the gains, up 13.9% and 12.9% respectively, while Ethena (ENA) rose 7.2%. Helium had the biggest drop, down 5.6%, followed by Book of Meme (BOME) down 5.6% and Celestia (TIA) down 5.5%.
The overall cryptocurrency market cap is currently $2.33 trillion, with Bitcoin’s dominance rate at 53.4%.
BTC inflows to exchanges fall to lowest level in nearly 10 years
Another set of data that investors are watching is the amount of Bitcoin inflows into cryptocurrency exchanges, which recently hit its lowest point in nearly a decade. As Bitcoin investment enters a new era of institutional participation, there has been a major shift in holder sentiment this year, which may mean that a bullish recovery is imminent.
According to CryptoQuant, investors looking to sell BTC have been decreasing since February 2018. The MA-365D exchange inflow has dropped from 90,000 to 36,000, and the current BTC inflow to exchanges is 20,000 BT, which is the lowest since 2015 (when Bitcoin was trading below $1,000 per coin).
Meanwhile, CryptoQuant analyst Axel Adler noted that long-term holders (LTH) also stopped selling tokens and started reaccumulating, which has historically been bullish.
Expected volatility
Analysts at Secure Digital Markets noted: “Since Saturday, Bitcoin has been fluctuating between $62,700 and $64,700. The continued decline in the US dollar index and 10-year Treasury yields supports the valuation of risk assets. A break above the $65,000 mark is undoubtedly bullish.”
Although Bitcoin is currently consolidating, analysts noted that the recent rally "has fueled enthusiasm among cryptocurrency options traders: call volume significantly exceeded put volume, indicating bullish sentiment in the market."
The data showed an increase in demand for out-of-the-money call options with strike prices between $70,000 and $100,000. According to Deribit data, traders took more than $688 million in call options at a $100,000 strike price across various expiration dates, marking the highest notional open interest on the platform.
Market analyst Bloodgood said that in the spot market, "buyers stepped in aggressively below $60,000, liquidating late short positions and currently holding the weekly support level of $58,000 to $59,000, but the bullish power needs to continue, otherwise it will fall back to this level sooner or later."
Bloodgood analyst said that the daily level we are interested in now is just below $65,000, which will tell us whether this rebound will continue to rise or fall back below $60,000. On the daily chart, we can see that a clear downward trend is continuing, with a new low below $57,000. "
Judging from the technical indicators, bulls want to see higher highs formed, which means they need to see Bitcoin rise above $67,000, while bears want to see this daily resistance level remain intact and bring Bitcoin back below $60,000. The bulls and bears will continue to compete within this range this week.
Speaking about the broader markets and forces affecting asset prices, Bloodgood said, “Macro factors have been swinging between hopes for a soft landing and dovish Fed policy and concerns about the resurgence of inflation.”
The boost that bulls need is the release of the non-farm payrolls (NFP) report on Friday, which revealed that the U.S. economy added 175,000 jobs in April 2024, slowing from the upwardly revised 315,000 jobs in March and well below the market's expectations for 243,000 job growth.
“Normally, a weak job market isn’t what most people consider good news, but in this case it’s a good thing for stocks and cryptocurrencies because it prompts the Fed to take a more dovish stance,” Bloodgood concluded.
Data provided by Alternative shows that overall sentiment in the cryptocurrency market remains in "greed" territory, which some analysts say means further weakness is needed to ensure excess froth is cleared from the market.
