After enduring a significant 20% price correction earlier this month that saw Bitcoin fall below $56,400 and increased outflows from the Bitcoin ETF market, the world’s largest cryptocurrency has managed to stage a strong comeback. It has broken above the key $66,000 resistance level and turned it into a new support zone.
BTC Bounces Back As Bitcoin ETF Inflows Soar
The resurgence in Bitcoin’s price has been closely tied to a rekindling of inflows into the US spot Bitcoin ETF market. Data from Farside shows that spot Bitcoin ETFs saw their best inflow week in two months, with the US fund category collectively notching $948 million in positive net flows from May 13 to May 17.
Interestingly, the majority of these inflows, approximately 89%, occurred in the last three trading days of the week, which industry analysts and researchers such as James Butterfill of CoinShares attribute to a shift in investor sentiment following the release of a lower-than-expected Consumer Price Index (CPI) report on Wednesday. Butterfill stated:
The inflows were an immediate response to the lower-than-expected CPI report, highlighting our view that Bitcoin prices have recoupled to interest rate expectations.
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Regionally, in terms of the overall Bitcoin market, the US-dominated inflows with $1,002 million, while Switzerland and Germany also saw small inflows of $27 million and $4.2 million, respectively.
Notably, the Grayscale Bitcoin Trust, which has seen outflows of $16.6 billion since the launch of the first Bitcoin ETF in January, saw small inflows totaling $18 million.
Beyond just spot Bitcoin ETFs, the digital asset investment product space experienced inflows for the second consecutive week, totaling $932 million, according to CoinShares. However, trading volumes remained relatively low at $10.5 billion, compared to the $40 billion seen in March.
Bitcoin Poised For Further Gains?
The renewed institutional interest in Bitcoin ETFs and the broader digital asset space has coincided with a strong price recovery for the leading cryptocurrency. Bitcoin’s ability to firmly hold the $66,250 support level, with over 530,000 BTC traded at this price, has given analysts confidence in the asset’s potential for further gains.
According to crypto analyst Ali Martinez, if the $66,000 support holds, Bitcoin could see strong potential for further gains in the coming days, demonstrating the bullish sentiment surrounding the largest…
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