Bitcoin has officially broken through the key resistance line! This increase is the result of massive inflows into US Bitcoin spot ETFs and a positive change in investor sentiment led by the Trump administration’s trade and monetary policy. The cryptocurrency's price has experienced notable volatility this week, marked by repeated rejections near its 200-day Exponential Moving Average (EMA) before finally surpassing this barrier. Even still, this breakthrough has reinstated new hope among investors. Profit taking has led to small correction over the last few trading sessions.
Until Friday, Bitcoin’s price had encountered significant resistance near the $85,000 level—the same level as its 200-day EMA—since April 13. On Monday, the cryptocurrency broke above this level in decisive fashion, rallying by 9.7% to close well above $90,000. That upward momentum rolled right into Wednesday. After struggling to get above the $95,000 level in recent days, Bitcoin reached that high of $94,696 before retreating a bit on Thursday.
As of Thursday, Bitcoin is approximately $92,000, which means it has gained 8.55% this week. Major US Bitcoin spot ETF inflows have driven this rally. On Wednesday, these defensive ETFs experienced a stunning $916.91 million in inflows, the third consecutive day of strong positive flows.
Technical Analysis and Price Targets
The technical outlook for Bitcoin indicates that this pullback is likely to be short-lived, fueled by profit-taking on the recent moves. Experts project that the current bullish sentiment might push Bitcoin to a retest of the $97,000 resistance mark.
A decisive close above $95,000 could signal a continuation of the upward trend, potentially extending the rally towards the next daily resistance at $97,000. On the flip side, if the bearish action deepens, Bitcoin might get support close to the psychologically important $90,000 mark.
Additionally, the Relative Strength Index (RSI) on the daily chart is 63 and quickly approaching overbought territory. This level indicates a strong to moderate level of bullish momentum. On Wednesday, the RSI surged towards the overbought level of 70. Unfortunately, it was met with a rejection, suggesting that bullish momentum might be fading.
Market Sentiment and External Factors
Investor confidence has been high. Much of this potential increase is due solely to a change in tone, as implied by the Trump administration, particularly with regard to trade relations with China and the Fed. The administration’s more conciliatory fresh approach to China tariffs molded a “risk-on” environment. Even in the absence of concrete plans, this shift enhances the allure of riskier assets such as Bitcoin.
Taken as a whole, this prevailing risk-on sentiment mirrors an overall market appetite for investments viewed as possessing greater growth potential. Perhaps most importantly, this positive sentiment has been an outsized driver of Bitcoin’s recent $70k appreciation.
In October 2021, the Securities & Exchange Commission greenlit the first Bitcoin futures ETF in the US. This decision was seen as a significant victory for the cryptocurrency industry. This regulatory approval paved the way for many more institutions to join. Consequently, Bitcoin began to earn greater legitimacy and recognition as an investment asset.
ETF Inflows and Institutional Adoption
The recent huge US Bitcoin spot ETF inflows clearly highlight the deepening institutional thirst for Bitcoin. These ETFs provide a regulated and accessible avenue for investors to gain exposure to Bitcoin without directly holding the cryptocurrency.
Investors have been furiously shoveling money into these ETFs. This movement reflects a deep-rooted long-term conviction that Bitcoin will represent a trustworthy store of value and serve as third direction alternative investment. This higher level of institutional participation should help drive enhanced market stability and liquidity.
Industry players have been watching how well the Bitcoin spot ETFs perform. In short, this performance is a bellwether for the broader macro investor sentiment and the state of institutional adoption. Further positive inflows of this type will undeniably continue to stoke the bullish narrative that’s grown up around Bitcoin.
