Ethereum’s price has been on a gradual decline since mid-March and has yet to show any decisive sign of recovery.

Yet today’s price action is critical, as it can finally bring back some bullish momentum to the market.

Technical Analysis

By TradingRage

The Daily Chart

Looking at the daily timeframe, Ethereum’s price has been trending lower inside a large descending channel and is yet to break it to either side.

Meanwhile, the cryptocurrency is currently testing the midline of the range and the key $3,000 level. With the 200-day moving average located near the $2,800 support zone, the market seems more likely to rally higher toward the $3,600 resistance zone in the coming weeks.

The 4-Hour Chart

The 4-hour chart paints a more clear picture. Ethereum’s price has been rapidly rising since yesterday, but it is currently being held by the midline of the channel and the $3,000 resistance level.

Meanwhile, the RSI is showing values above 50% at the moment, indicating that the momentum is in favor of the buyers. Therefore, a breakout above the midline of the channel could lead to a quick rally toward the $3,600 resistance area.

Sentiment Analysis

By TradingRage

Exchange Reserve

Ethereum’s price has been following a downward trajectory since its rejection from the $4,000 level. Meanwhile, analyzing the market’s supply and demand dynamics can yield important information.

This chart presents the Exchange Reserve metric and its 30-day moving overage for Ethereum. Rising values are typically associated with an increase in selling pressure, as they usually indicate that the deposits are being exchanged by holders who want to sell their coins.

As the chart demonstrates, the exchange reserve metric has been experiencing an overall decline during the last few months. However, the metric has recently broken above its moving average, a sign that unusual selling has previously materialized during price drops or reversals. Therefore, investors should be hopeful that the supply will be met with sufficient demand, or things could get ugly soon.

QCP Capital has forecasted a bullish momentum that could see bitcoin reach its previous highs of $74,000 in the next few months.

This follows a surge in BTC’s price on May 15th, fueled by growing ETF inflows and the April Consumer Price Index (CPI), which indicated a slight decrease in inflation from the previous month.

Institutional Adoption and Bullish Momentum

According to insights provided by QCP Capital, the U.S. CPI figures caused a breakout across various risk assets, propelling BTC back above the $66,000 mark.

“We expect bullish momentum here that could take us back to the highs of $74,000,” remarked QCP Capital.

They observed increased buying activity, with investors acquiring 100-120k BTC Calls for December 2024. There has also been extensive institutional adoption of the primary cryptocurrency, with major asset managers such as Millenium and Schonfeld allocating approximately 3% and 2% of their assets under management (AUM) to spot Bitcoin ETFs.

Analysts at QCP Capital also highlighted favorable market conditions, including sovereign and institutional adoption, easing inflationary pressures, and the anticipation of upcoming U.S. elections, contributing to the potential bull market’s resurgence.

QCP Capital recommends traders adopt strategies such as the Bullish ERKO Seagulls. Designed to capitalize on upward price movements while mitigating downside risks, they offer investors an opportunity to participate in bitcoin’s potential bull run with minimal upfront costs.

For instance, the Bullish ERKO Seagull for June offers a cost-neutral approach with a maximum payout of $18,000 per BTC if the spot price hovers just under $88,000 at expiry. Similarly, the August Seagull presents a similar risk-reward profile, with a potential payout of $30,000 per BTC if the spot price approaches $100,000 by the expiry date.

Bitcoin Surges as Inflation Eases

According to a report released on May 15, the Consumer Price Index, which serves as a comprehensive measure of the cost of goods and services at the point of sale in the US, indicated a slight decrease in inflation compared to the previous month.

On Wednesday, bitcoin experienced a surge following the release of the April CPI, as its price soared by over 7% to reach $66,567.91, marking its best performance since March 25. Bitcoin has also surpassed its 50-day moving average for the first time since April 13.

This surge on Wednesday propelled BTC to a weekly gain of 7%, its most notable increase since the last week of March, reversing a month-and-a-half downward trend. According to data from CoinGecko, as of this writing, Bitcoin is trading at around $66,0007, representing a 6% increase in the last 24 hours.

The first month after the Bitcoin halving last month has been uneventful. However, this might change soon as CryptoQuant observed a serious spike in the volume of stablecoins entering the market.

Interestingly, there are significant jumps in stablecoin inflows at various points, often corresponding with movements in bitcoin’s price.

Surge in Liquidity Signals Strong Bullish Trend

Bitcoin witnessed a significant increase in value after the historic approval of US spot exchange-traded funds (ETFs) this year. However, it has been struggling to gain upward momentum since it dropped below its 2021 all-time high of $69,044 in early April. The initial hype over ETFs has diminished, slowing down the cryptocurrency’s previously unstoppable climb.

Nevertheless, there are signs of improvements due to increased liquidity in the market, as seen by the recent notable increase in stablecoin inflows.

Such an influx can impact the supply and demand dynamics of bitcoin, potentially leading to increased price volatility, according to the on-chain intelligence platform’s findings.

“The price of bitcoin has shown multiple fluctuations over time, while the blue area indicates the amount of stablecoins entering the market. Notably, there are significant increases in stablecoin inflows at various points, which often coincide with Bitcoin’s price movements.”

Bitcoin experienced its largest single-day increase in nearly two months this week due to contradicting US economic data, which increased the likelihood of the Federal Reserve joining other countries in easing monetary policy through rate cuts during the summer. As a result, the world’s leading cryptocurrency surged by almost 8% to $66,400, marking its most significant gain since March 20.

Bitcoin Back to New ATH?

Prominent crypto trading firm QCP Capital noted that the bullish momentum turnaround could push BTC towards retesting its previous highs of around $74,000.

It also observed a significant increase in buyers of 100-120k BTC Calls for December 2024, indicating growing confidence in the asset’s value. Meanwhile, institutional demand for the cryptocurrency remains strong, with major asset managers such as Millenium and Schonfeld allocating approximately 3% and 2% of their assets under management (AUM) into the spot Bitcoin ETF.

These factors paint a bullish picture of BTC’s potential breakout.

Solana-based DeFi memecoin platform Pump.fun experienced a significant breach on May 16 when an exploiter apparently utilized flash loans to manipulate the platform’s bonding curve contracts.

The platform has since paused all trading activities.

In a statement on social media, Pump.fun acknowledged the exploit and assured users that the platform is investigating the issue. The team wrote:

“We have upgraded the contracts so the attacker cannot siphon any more funds. The TVL in the protocol right now is safe. We’ve paused trading — you cannot buy and sell any coins at the moment. Any coins that are currently in the process of migrating to Raydium cannot be traded and will not be migrating for an indefinite period of time.”

Industry experts, including Wintermute head of research Igor Igamberdiev, suggested that a key had been compromised, raising the possibility of an inside job. He estimated the loss to be at least 12,000 SOL, equivalent to roughly $2 million.

An account on X, identified as STACCoveflow, claimed responsibility for the attack shortly after the exploit broke in the news. Stacc hinted at a larger motive in their posts, stating:

“I’m about to change the course of history.”

He implied that he did not intend to keep the stolen funds but planned to redistribute the “remaining balances of bonding curves” to certain token users. The exact method Stacc used to execute the attack remains unclear, and it is unknown if the balances are indeed being distributed to other users.

The account allegedly belongs to a doxxed developer who previously worked on Pump.fun. Additionally, several accounts claimed that Stacc had airdropped the stolen SOL to holders of four different coins.

However, CryptoSlate was unable to verify the claims on social media as of press time.

Turkey and India advanced crypto policies on May 16 that could create a framework for businesses and investors operating in each country.

Reuters reported that the Securities and Exchange Board of India (SEBI) wants multiple regulators to oversee crypto trading in the country.

In its recommendation, SEBI said it could monitor crypto securities, oversee initial coin offerings (ICOs), and issue licenses for equity market-related products.

Other agencies could regulate insurance and pension-related virtual assets, while the Reserve Bank of India (RBI) would regulate fiat-backed cryptos.

SEBI’s request is at odds with RBI’s position. The bank believes that private digital currencies are a macroeconomic risk. It expressed concerns about tax evasion, the need for voluntary compliance in P2P activities, and reduced profits from central bank money creation.

SEBI and RBI outlined their position in documents submitted to a government panel for consideration, which Reuters said could “firm up its report as early as June.”

Turkey’s draft law

Reuters also reported that Turkey’s ruling party presented a draft law that aims to have crypto companies meet licensing and registration obligations.

If the proposed regulations succeed, crypto exchanges and other companies must obtain licenses from Turkey’s Capital Markets Board.

The draft law outlines requirements and liabilities regarding platform management, offerable services, and operational standards. It aims to regulate certain activities, including crypto purchases, sales, and transfers among individuals in Turkey and crypto storage.

The law would also grant the Capital Markets Board authority to advance secondary regulation and create regulatory procedures for companies and their transactions.

Strict crypto stances

India and Turkey both have strict crypto policies.

In 2021, Turkey banned the use of crypto in payments, listing a lack of regulatory controls, use in illegal activities, theft, and irreversible transactions among its concerns.

In 2018, India’s Reserve Bank banned financial institutions from engaging with companies that work with crypto. Though the rule was later overturned, broader financial regulations apply, and the Reserve Bank continues to urge against legalization.

India has also taken other actions against crypto, including issuing compliance notices to foreign crypto exchanges and imposing IP bans on the exchanges.

Accordingly, each of the latest developments advances regulations that could accommodate crypto activities in countries known for their harsh policies.

Coinbase became arguably the most important crypto player in the US this year as numerous ETF providers, including BlackRock, chose the platform to serve as custodian to their Bitcoin exchange-traded funds.

Adding the overall bull run for the entire market resulted in positive price movements for its shares, which jumped to over $250 earlier this year. However, COIN dumped hard on Thursday, perhaps due to rising competition on local soil.

The Brian Armstrong-spearheaded company has become something of a monopolist on the Bitcoin ETF custodian front mostly because it is among the few publicly-traded crypto exchanges in the States.

This benefited the company during the first quarter of 2024 – when the ETFs launched – and its Q1 report beat expectations, posting a massive revenue surge of 72%.

Naturally, this also impacted Coinbase’s shares, which jumped from about $156 at the start of the year to a multi-month peak of $280 in late March, taking advantage of the broader crypto market resurgence and BTC’s new ATH.

However, COIN started to retrace alongside the rest of the market in April and May but still maintained a healthy level of over $200. That changed yesterday when the shares dropped by 9.43% from $215 to $199.

The most probable reason for this is not related to the market moves, as BTC was well in the green, skyrocketing to a 3-week high of over $66,500. In fact, it could be related to impending competition on the spot trading front in the US.

CME Group, typically known for its involvement in futures Bitcoin and Ethereum trading, outlined initial plans to introduce spot BTC trading services. Given the fact that CME is a well-established player in traditional finance and has a rich history in crypto, such a potential launch could take away market share for dominant forces like Coinbase and Binance.

Separately, Cathie Wood’s Ark Invest has been gradually offloading its COIN shares for the past few weeks, which could also increase the selling pressure.

Bitcoin’s price tapped a multi-week high yesterday at around $66,600 before it was pushed down by about a grand but has reclaimed the $66,000 level as of now.

Several altcoins have continued their recent rally, with LINK taking the main stage following a massive 18% surge.

BTC Back to $66K

The primary cryptocurrency had a tough end of the previous business week when it was brought down to just inches above $60,000. Instead of going below that coveted round-numbered milestone, though, the asset bounced off during the weekend and especially on Monday.

The bulls initiated an impressive leg-up at the start of the current week that drove bitcoin to just over $63,000. It failed there at first, dropping to $61,200 amid some Coinbase issues, but went back on the offensive on Wednesday after the US announced the CPI numbers for April.

As the spot Bitcoin ETF inflows kept increasing on Wednesday and Thursday, BTC’s price soared to a three-week high of just over $66,500. The asset retraced slightly yesterday evening but has jumped back above $66,000 as of now amid the fourth consecutive day of positive flows into those ETFs.

Its market cap remains slightly above $1.3 trillion, but its dominance over the alts has taken a hit and is down to 51.7%.

LINK Skyrockets

Most alternative coins turned green yesterday in a similar fashion to bitcoin. While some, such as BNB, DOGE, TON, TRX, and SHIB, are slightly in the red now, most others have kept climbing.

Ethereum and Ripple are up by 0.5-1%, which has helped the former maintain $3,000 and the latter $0.5. More gains come from the likes of SOL, ADA, AVAX, DOT, BCH, HBAR, and ICP.

However, Chainlink has stolen the show from the larger-cap alts. LINK has skyrocketed by more than 18% in the past day and now trades above $16.

The total crypto market cap has remained relatively still on a daily scale at just over $2.5 trillion on CG.