Green Light to ETH ETF

Crypto Compass 113

“Facts do not cease to exist because they are ignored.” - Aldous Huxley

• BTC tested $72k last week again and was rejected for the third time; $72K is a major resistance level. When BTC breaks that level with confirmation a new ATH would be imminent, potentially $75k as speedometers starts to show bullish signals. We expect it to continue trading in a range between $64k and $72k for a while giving altcoins a time to shine.

• The range of $72k-$74k is characterised by a high level of supply, resulting in substantial selling pressure and making it a challenging barrier for BTC buyers to overcome. A sudden breach above this critical juncture could trigger a notable upward movement due to a significant short-squeeze event, potentially leading to a new all-time high.

Figure 1: Speedometers of BTC’s main metrics.

• Softer-than-expected US inflation expectation numbers for May drove buyer demand for BTC and the broader market on Friday, helping BTC recover from below $67k. However, BTC remains below the $70k mark. Uncertainty about a potential September Fed rate cut could impact BTC price trends, especially with the upcoming US Personal Income and Outlays Report on May 31.

• Better-than-expected personal income/spending data and higher-than-expected inflation numbers could lead to speculation about a Fed rate hike, potentially triggering a broad-based crypto sell-off. However, positive news related to the ETH spot ETF market could mitigate the effects of a more hawkish Fed rate path, providing support to the market.

Figure 2: PCE price index, the Fed’s favourite inflation indicator.

• The 4-hour chart shows that BTC experienced increased buying pressure after breaking above the $65K mark, pushing its price to $72K. This level aligns with the upper boundary of a multi-month descending wedge, indicating a significant supply zone. However, selling pressure around $72K has led to a downtrend, and BTC has formed a head and shoulders pattern near the upper boundary, with sellers attempting to push it below the neckline.