Today Bitcoin records a growth of 1.7% bringing the prices of the largest crypto asset above $66,000, increasing the chances of a continuation of the bull market: but why is BTC rising today?
What are the causes that are favoring the emergence of bulls to the detriment of bears?
Let’s analyze the situation together.
Why is Bitcoin rising today? the main causes
Bitcoin today marks a growth of 1.7%, reaching $66,340 and reinforcing the argument that the recent bearish movement can be identified as a retracement of a larger bullish trend.
But why is Bitcoin rising today? What factors are to be attributed as the main cause of this unexpected movement?
First of all, the buying pressure in the last few hours could be due to inflows from US ETFs, which in the session of May 16 recorded inflows of 257 million dollars.
The IBIT and ARKB funds, respectively managed by BlackRock and Ark Invest, lead the ranking of buyers with total inflows of 160 million dollars.
It is worth noting the positive, albeit small, inflow of the Grayscale ETF which seems to have stopped its predisposition towards liquidating its assets for a few days now.
NEW: 🇺🇸 #Bitcoin ETFs saw $257 million in inflows yesterday, marking the fourth consecutive day of inflows.
Tides are turning 🚀 pic.twitter.com/HGcalsgfG6
— Bitcoin Magazine (@BitcoinMagazine) May 17, 2024
Ishares Bitcoin Trust (IBIT) is without a doubt the fund that has most driven institutional interest in Bitcoin, with 414 investors reported in the first months of listing.
Since its launch in January, it has grown to incorporate 16.6 billion dollars making it the most popular Bitcoin investment for regular investors like major companies Millennium Management, Schonfeld Strategic Advisors, and Aristeia Capital, which recently revealed their stakes in IBIT.
$IBIT ended up with 414 reported holders in its first 13F season, which is mind boggling, blows away record. Even having 20 holders as a newborn is bfd, highly rare. Here’s a look at how the btc ETFs compare to other ETFs launched in Jan (aka the Class of 2024) in this metric. pic.twitter.com/ngicEdbaTq
— Eric Balchunas (@EricBalchunas) May 16, 2024
Another factor that may have favored the growth of the price of Bitcoin today is the growing demand from Chicago Mercantile Exchange (CME) investors for the group’s entry into the Bitcoin spot ETF sector.
The CME was the first futures ETF approved during the 2017 bubble, and is currently the most traded with an open interest of 9 billion dollars, but has not yet experienced the effect of trading the fund with spot collateral.
Although the Chicago-based company launched Bitcoin options in 2020 and micro-Bitcoin futures in May 2021 for smaller contracts, it could now take the big step and join BlackRock, Grayscale, Fidelity, ARK, and company.
The transition of the CME group into Bitcoin spot trading could have a decisive impact on Bitcoin’s price action. Investors have anticipated the possibility of such an event in the market.
NEW: 🇺🇸 World’s largest futures exchange, CME Group is planning to launch #Bitcoin trading.
Wall Street is here 🙌 pic.twitter.com/fFdX42Gr3f
— Bitcoin Magazine (@BitcoinMagazine) May 16, 2024
Finally, the last reason why the price of Bitcoin is rising today, can be correlated to the positive opening of the Chinese stock exchanges, with Shanghai today showing a positive increase of 1% reaching 3,154 points.
The FTSE China A50 Index, which is an index of the stock market of the FTSE Group, is reporting a 1.29% increase in prices today.
Alibaba (BABA), one of the largest and most capitalized companies in China, records one of the most significant gains in recent months with a performance of +7%.
We underline in this regard how Michael Burry, famous investor protagonist of the movie “The Big Short“, has recently added significant shares to his investment in Alibaba.
The recovery of the Eastern stock market after a difficult period may have also supported the growth of more speculative assets such as Bitcoin.
Alibaba $BABA up over 7% for the day
This is Burry’s second largest position at 8.74%
He upped his position size 66.67% in his recent filing pic.twitter.com/IR1LHAVRWO
— Michael Burry Stock Tracker ♟ (@burrytracker) May 16, 2024
BTC price analysis: $66,000 recovered
Thanks to today’s bullish momentum, Bitcoin has managed to recover the price threshold of $66,000, suggesting a possible bullish restart after the correction in the months of March and April.
The local bottom of the crypto at $56,500, touched during the trading session on May 1, 2024, is further emphasized with the recovery of current prices that are above the EMA 50 daily.
The RSI index is slightly increasing, while spot volumes do not seem particularly encouraging, even though significant trades were recorded two days ago.
The open interest at 17.5 billion gives hope that the same speculation FOMO will soon return, which allowed digital gold to go from $39,000 to $73,000 in the first quarter of the year.
The funding rate is still in positive territory, highlighting a greater tendency towards leverage on the buyers’ side rather than the sellers’.
Now for Bitcoin the goal is to initially recover the $70,000, and then the $72,000 to then aim for new all-time highs.
During the weekend we could see some bearish influence with prices possibly visiting the $64,000 support area.
Anyway, if Bitcoin manages to open next week by asserting itself above current values, it would have excellent chances of continuing its upward trend, approaching the appointment with historical highs.
Be careful not to overexpose yourself to speculative assets like Bitcoin in times of macro uncertainty like these, where the upcoming data on inflation and interest rates could have a fatal influence on price direction.
