Currently, the inflow of BTC into exchanges is 20,000 BTC, the lowest in nearly 10 years. Analysts point out that long-term holders (LTH) have stopped selling tokens and have begun to accumulate again, which has historically been bullish.
On May 7th, the cryptocurrency market was in a consolidation mode, with Bitcoin continuing to stay above $63,000, while most altcoins experienced slight declines. Data shows that on Tuesday, the Bitcoin trading price ranged from $62,815 to $64,445, with both bulls and bears evenly matched. At the time of writing, the BTC trading price is $63,010, down 0.5% in the past 24 hours.
Among the altcoins, most tokens in the top 200 by market capitalization are trending downward. AIOZ Network (AIOZ) and Jito (JTO) saw gains of 13.9% and 12.9% respectively, while Ethena (ENA) rose 7.2%. Helium had the largest decrease, down 5.6%, followed by Book of Meme (BOME) down 5.6% and Celestia (TIA) down 5.5%.
The overall market capitalization of cryptocurrencies is currently $2.33 trillion, with Bitcoin’s dominance rate at 53.4%.
The inflow of Bitcoin into exchanges drops to the lowest level in nearly 10 years
Another set of data that investors are paying attention to is the inflow of Bitcoin into cryptocurrency exchanges. This data has recently reached its lowest point in nearly a decade. With the entry of institutional investors into Bitcoin investments in this new era, there has been a significant shift in holder sentiment this year, indicating a potential bullish recovery.
According to data from 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 inflow of BTC into exchanges is 20,000 BTC, the lowest since 2015 when the Bitcoin trading price was below $1,000 per BTC.
At the same time, CryptoQuant analyst Axel Adler pointed out that long-term holders (LTH) have also stopped selling tokens and have started accumulating again, which has historically been bullish.
Expected volatility
Secure Digital Markets analysts pointed out, “Since Saturday, Bitcoin has been fluctuating between $62,700 and $64,700. The continuous decline in the US dollar index and the 10-year Treasury yield have supported the valuation of risk assets. Breaking through the $65,000 mark undoubtedly indicates bullishness.”
Although Bitcoin is currently in a consolidation phase, analysts noted that the recent rebound “has sparked enthusiasm among cryptocurrency options traders, with significantly higher trading volume for bullish options than bearish options, indicating a bullish market sentiment.”
Data shows an increased demand for out-of-the-money bullish options with strike prices between $70,000 and $100,000. According to Deribit data, traders have obtained over $688 million worth of bullish options with a strike price of $100,000, marking the highest notional open interest on the platform.
Market analyst Bloodgood stated that in the spot market, “buyers have heavily entered below $60,000, clearing the late short positions. Currently, it is maintaining the support level between $58,000 and $59,000. However, the bullish momentum needs to continue, otherwise it will eventually fall back to this level.”
Bloodgood analyst added, “The daily level that we are currently interested in is slightly below $65,000, which will tell us whether this rebound will continue to rise or fall below $60,000. On the daily chart, we can see a clear downward trend that is continuing, with a new low below $57,000.”
From a technical indicator perspective, bulls hope to see higher highs forming, which means Bitcoin needs to rise above $67,000, while bears hope to see the daily resistance level unchanged and bring Bitcoin back below $60,000. This week, both bulls and bears will continue to compete within this range.
When discussing broader market forces that affect asset prices, Bloodgood stated, “Macro factors have been swinging between soft landing and dovish Federal Reserve policies, as well as concerns about resurging inflation.”
The driving force that bulls need is the non-farm payroll report (NFP) released on Friday. The NFP revealed that the US economy added 175,000 jobs in April 2024, which slowed down compared to the upwardly revised 315,000 jobs in March and was far below the market’s expected growth of 243,000 jobs.
Bloodgood concluded, “In normal circumstances, a weak job market is not seen as good news, but in this case, it is good for stocks and cryptocurrencies because it prompts the Federal Reserve to take a more dovish stance.”
Data provided by Alternative shows that the overall sentiment in the cryptocurrency market is still in the “greed” territory. Some analysts suggest that further softening is needed to ensure the removal of excess bubbles from the market.