On Tuesday, the cryptocurrency market was in a consolidation phase, with Bitcoin staying above $63,000 while most altcoins experienced slight declines.
According to Bitpush data, the trading range for Bitcoin on Tuesday was between $62,815 and $64,445, with a balanced battle between bulls and bears. At the time of writing this article, BTC was trading at $63,010, experiencing a 0.5% decline in the past 24 hours.
Among the altcoins, the majority of the top 200 tokens by market capitalization were in a downward trend. AIOZ Network (AIOZ) and Jito (JTO) were the top gainers, rising by 13.9% and 12.9% respectively, while Ethena (ENA) saw a 7.2% increase. Helium had the largest decline, dropping by 5.6%, followed by Book of Meme (BOME) and Celestia (TIA) with declines of 5.6% and 5.5% respectively.
The overall market capitalization of cryptocurrencies is currently at $2.33 trillion, with Bitcoin’s dominance rate at 53.4%.
Another set of data that investors are paying attention to is the inflow of Bitcoin into cryptocurrency exchanges, which has recently reached its lowest point in nearly a decade. With the influx of institutional investors into Bitcoin investment, 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 365-day moving average of BTC exchange inflows has dropped from 90,000 to 36,000, and the current BTC inflow into exchanges is 20,000 BTC, the lowest since 2015 when the Bitcoin trading price was below $1,000 per coin.
Meanwhile, CryptoQuant analyst Axel Adler pointed out that long-term holders (LTH) have also stopped selling tokens and started accumulating again, which has historically been a bullish sign.
Secure Digital Markets analyst noted that 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 has supported the valuation of risk assets. Breaking through the $65,000 mark undoubtedly indicates a bullish trend.
Although Bitcoin is currently in a consolidation phase, analysts have pointed out that the recent rebound has “ignited the enthusiasm of cryptocurrency options traders, with significantly more trading volume for call options than put options, indicating a bullish sentiment in the market.”
Data shows an increased demand for out-of-the-money call options with strike prices between $70,000 and $100,000. According to Deribit data, traders have acquired call options with a notional open interest of over $688 million at a strike price of $100,000, marking the highest on the platform.
Market analyst Bloodgood stated that in the spot market, buyers have entered aggressively below $60,000, clearing out later short positions, and currently maintaining support levels around $58,000 to $59,000. However, bullish momentum needs to continue, otherwise it will eventually fall back to this level.
Bloodgood analyst said that the daily level of interest now 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 that a clear downward trend is continuing, with a new low below $57,000.
From a technical indicator perspective, the bulls hope to see higher highs, which means Bitcoin needs to rise above $67,000, while the bears hope to see the daily resistance level remain unchanged and bring Bitcoin back below $60,000. Both sides will continue to compete within this range this week.
Discussing the broader market and forces that affect asset prices, Bloodgood stated that “macro factors have been swinging between hopes for a soft landing and dovish Fed policies, and concerns about a resurgence of inflation.”
The catalyst that the bulls need is the release of the Non-Farm Payrolls (NFP) report on Friday. The NFP revealed that the US economy added 175,000 jobs in April 2024, slowing down from the upwardly revised 315,000 jobs in March and far below the market’s expectation of 243,000 job growth.
Bloodgood concluded that normally a weak job market is not considered good news for most people, but in this case, it is good for stocks and cryptocurrencies as it prompts the Fed to adopt a more dovish stance.
According to data provided by Alternative, the overall sentiment in the cryptocurrency market is still in the “greed” territory, and some analysts suggest that further softening is needed to ensure the removal of excess bubbles from the market.