BTC surges 6% to $70,000 as Ethereum ETF rumors fuel market frenzy.

Bitcoin (BTC) surged past $70,000 on May 21, marking a significant milestone amid a flood of investments in spot Bitcoin exchange-traded funds (ETFs) and a broader market rally.

Bitcoin price rose 6% in 24 hours to $70,325, before settling at $68,700 at press time. CryptoSlate data.

Ethereum (ETH) has led a rally over the past few hours, experiencing a massive 14.5% rise in one hour on Monday amid speculation that the US SEC may approve a spot Ethereum ETF.

ETH has risen from $3,143 to $3,518 at press time.

new interest

The renewed interest in Bitcoin ETFs follows weeks of outflows, with nearly $1 billion flowing into these funds, giving investors exposure to the leading digital asset.

This surge has led to significant liquidations in the market, with more than $235 million in positions closed in the past 24 hours, including $63 million in short Bitcoin positions alone, according to CoinGlass.

Analysts point out that most on-chain indicators point to the start of a bull market, even though they are showing some signs of a potential peak. A recent bounce near $60,000 has sparked renewed interest, with Farside Investors reporting inflows of about $950 million last week, levels not seen since March.

Bitcoin’s 51% year-to-date gain reflects investor expectations of US monetary expansion, evidenced by the M2 monetary base exceeding $21 trillion in April 2024. This increase in circulating funds suggests that inflationary pressures are rising despite a period of hesitation by companies and individuals to spend.

Meanwhile, the Federal Reserve’s efforts to manage inflation and avoid a recession could affect the liquidity and attractiveness of assets such as Bitcoin.

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Bitcoin reached a new all-time high of $73,737 in March and is currently 5% below that level. The recent movement appears to be largely driven by new Bitcoin ETFs, which trade on traditional stock exchanges and allow investors to purchase stocks that track the price of the asset.

Supporting the bullish sentiment, Bitcoin holdings on major exchanges fell to a seven-year low. According to data from CryptoQuant, as of May 19, there were only 1,918,417 BTC available on major trading platforms, a significant decrease from the previous year.

This scarcity, combined with the recent halving event that reduces potential new supply for miners, makes it increasingly difficult to justify a bearish outlook for Bitcoin.

The cryptocurrency community continues to closely watch Bitcoin’s price action unfold, with many wondering whether the digital asset will continue to rise in the coming weeks or face a significant correction.

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