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Writer's picturemeowdini
May 203 min read

ETFs Buy 3X New BTC Supply — 5 Things to Know in Bitcoin This Week

Bitcoin is facing renewed calls for a supply shock as exchange reserves hit seven-year lows, and BTC price action focuses on final resistance. The largest cryptocurrency is edging closer to a rematch with final resistance around all-time highs past and present — at $69,000 and $73,800.




Whether Bitcoin gets there in the coming days is the main preoccupation facing market participants, and various factors could contribute to a bullish continuation. These include cues from United States economic policy as the Federal Reserve releases minutes from its May meeting, while U.S. unemployment data is also waiting in the wings.

When it comes to BTC price action, traders are getting ever more confident that a local bottom has come and that upside is what should result after two months of consolidation. Meanwhile, a refreshing divergence may be playing out — prices are higher, but sentiment is lingering around lower levels than during the March peak.


1. Bitcoin Bulls Keep Up Pressure Below All-Time Highs

Bitcoin certainly feels back in business this week, returning to near $67,000 into the Asia session after briefly dipping into the weekly close. That brief spate of weakness accompanied geopolitical uncertainty from Iran, but markets soon forgot this as BTC/USD preserved its 10% May gains.

The latest data from monitoring resource CoinGlass now shows that the bulk of immediate overhead resistance lies just below $68,000. Additional data shared by IT Tech, a contributor to the on-chain analytics platform CryptoQuant, shows liquidation levels surrounding spot price.

Commenting on the latest BTC price action, market participants were in a positive mood. Popular trader Crypto Damus noted, "Beauty of a BTC weekly close. First Bullish engulfing weekly since October 2023." Michaël van de Poppe, founder and CEO of trading firm MNTrading, reiterated his thoughts regarding a steady trek toward new highs for Bitcoin.


2. U.S. Jobs Data, Fed Headline Macro Week

The macro landscape is not dominated by U.S. economic reports in the coming days. Instead, the Fed takes center stage in the form of a slew of speaking appearances from senior officials. The minutes from the May meeting of the Federal Open Market Committee, where interest rates were discussed, are due for release on May 22. U.S. jobless claims could provide another bout of volatility for risk assets, continuing a trend seen this month and before.

At the same time, attention is increasingly focusing on favorable liquidity conditions in both the U.S. and beyond. In his latest content, financial commentator Tedtalksmacro suggested that the crypto bull run is "far from over" as a result.


3. Bitcoin ETFs Preempt "New Faith" in BTC

Tedtalksmacro touched on what could shape up to be a strong comeback from the U.S. spot Bitcoin exchange-traded funds (ETFs). After struggling for weeks on end since Bitcoin’s all-time highs in March, the spot ETF products are seeing renewed interest. Last week, inflows hit almost $1 billion — the best weekly performance since that time.

Bitcoin ETFs have purchased 21,700 BTC ($1.5B) in the month to date, which is 3X the supply of new bitcoin from miners. The U.S. spot ETFs alone now hold approximately 2.8% of the total BTC supply.



4. Bitcoin Exchange Reserves Plummet to Seven-Year Lows

New data currently circulating on social media puts the amount of Bitcoin available for purchase on major trading platforms at the lowest since 2017. This comes courtesy of CryptoQuant, which puts the tally at 1,918,417 BTC as of May 19. A year ago, this was around 400,000 BTC higher.

CryptoQuant contributing analyst highlighted that in 2021, during the peak of the bull market, approximately 2.7 million Bitcoins were held in exchange reserves, with Bitcoin trading at around $69,000. Three years later, the reserves have decreased to about 2 million Bitcoin, yet the trading prices are nearing historical highs.


5. Sustainable Greed?

The Crypto Fear & Greed Index, which uses a basket of factors to determine the sustainability of overall crypto sentiment, currently stands at 70/100. While “greedy,” this is so far devoid of the excessive levels seen during the trip to Bitcoin’s all-time highs in March, when it hit 90/100. Analyzing the mood, research firm Santiment determined the most bullish feeling on Bitcoin since January, adding that "FOMO" on the part of buyers needs to stay low for the positive trend to continue.


Disclaimer

The information provided in this article is for informational purposes only and does not constitute financial, investment, or other professional advice. Cryptocurrency investments are inherently risky and you should always conduct your research before making any investment decisions.




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