Bulls under house arrest at 68K levels despite high inflows in Bitcoin spot ETFs

Investors perplexed about why there hasn't been a greater uptick in optimistic sentiment despite the recent inflows into Bitcoin spot ETFs

Olumide Adesina•Sunday, June 2, 2024•2 min read

Bitcoin posted a 7% decline, closing at $67,7K after nearly hitting $72K on May 21. Although given that Bitcoin is still roughly 9% below its all-time high, such a loss does not portend a pessimistic trend. Investors are perplexed about why there hasn’t been a greater uptick in optimistic sentiment despite the recent inflows into Bitcoin spot exchange-traded funds (ETFs).

Even though the U.S. spot Bitcoin ETF market has more than $50 billion in assets under management, bitcoin bulls are under tremendous pressure amid evolving uncertainty in the regulatory space, However, price action indicates that the flagship cryptocurrency asset showed a brief positive trend, with higher highs and lower lows, and a top of $70,601.

The main resistance level is located at $70.5K, while support is at the $67.1K mark. At these levels, notable jumps in volume indicate significant trading activity, which traders should keep a close eye on.
Oscillators give contradictory information. The Stochastic oscillator is at 42, the commodities channel index (CCI) is at 38, and the average directional index (ADX) is at 22, all pointing to a lack of significant momentum in either direction. The relative strength index (RSI) is at 55, indicating a neutral position.
Prominent exchanges and middlemen, such as Binance, Coinbase, Kraken, KuCoin, and Robinhood, are facing legal action from the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission.

In addition, Roger “Bitcoin Jesus” Ver faces accusations from the US Department of Justice for alleged seven-year tax evasion and fraud, and the co-founders of Tornado Cash and the creators of Samourai Wallet for money laundering. While these incidents have no direct bearing on Bitcoin, they damage the industry’s reputation and deter institutional investors from investing in it.

This is not only a US problem. For example, exchanges dealing with cryptocurrencies and not yet registered to operate in the region have been given a deadline by Hong Kong’s Securities and Futures Commission. Only 18 exchanges had submitted license applications as of May 31. Large firms including Gate, Huobi, and OKX have chosen not to apply because of Hong Kong’s strict regulations.

These elements do not establish a hard cap on Bitcoin at $70,000 or comparable levels, nor rule out the influence these factors may have on cryptocurrency middlemen and the potential selling pressure resulting from the distribution of Mt. Gox coins. It is advised that traders stay alert for indications of a decline because the market consolidation and lower volume may portend continued sideways movement or a pullback.

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ABOUT THE AUTHOR See More

Olumide Adesina

Financial Market Writer

Olumide Adesina is a French-born Nigerian financial writer. He tracks, analyzes, and reports changes in financial markets with over 15 years of working experience in investment trading.