Bitcoin appears to be aligning with the perspectives of conventional investors who have entered the digital asset space through the introduction of US exchange-traded funds (ETFs). Additionally, on May 4, the price of BTC surged to $64,500 due to fresh gains in out-of-hours trading.
Bitcoin saw a significant surge on Friday following a report that revealed a smaller-than-expected increase in US employment. This news has reignited expectations for interest rate cuts, which, in turn, has increased the appeal of speculative assets.
The rally managed to recover a substantial portion of the earlier losses caused by concerns about Federal Reserve officials adopting a more hawkish stance and a decrease in demand for the ETFs.
On Friday, Bitcoin experienced a notable 7% increase, reaching a price of $62,937. This upward movement also had a positive impact on other cryptocurrencies, including Ether, Solana, and even meme-based coins like Dogecoin. However, Bitcoin’s price experienced a significant decline on May 1, reaching its lowest point in around two months at $56,527.
Investors withdrew a significant amount of money totaling $564 million from a group of nearly a dozen US ETFs on Wednesday. This marked the largest outflow of funds since these products were introduced in January. The higher-for-longer interest rates have also negatively affected other markets, such as equities.
The drop in Bitcoin from its record high of nearly $74,000 in March has raised concerns among traders. Some market analysts suggest that traders may perceive risks in the global macro environment that the Fed or general investors have not yet recognized.
Currently, the value of Bitcoin (BTC) stands at $63,571.91, representing a slight decrease of 0.2% compared to an hour ago, but a notable increase of 2.9% since yesterday. The current value of BTC is 1.0% higher than its value a week ago.
The global crypto market cap currently stands at $2.47 trillion, with a 2.42% change in the last 24 hours and a significant 100.47% change compared to one year ago. BTC’s market cap stands at $1.25 trillion, indicating a Bitcoin dominance of 50.63%. Meanwhile, the market cap of Stablecoins stands at $161 billion, accounting for 6.51% of the total crypto market cap.
The strength seen in the United States employment data gained momentum towards the end of the day, driven by positive signs of recovery in the crypto market, such as the recent inflows into the Grayscale Bitcoin Trust (GBTC) after a gap of almost three months.
According to data from monitoring resource CoinGlass, BTC/USD has seen a 5% increase month-to-date at the time of writing, which is a significant improvement compared to the 15% losses in April.
Despite the impressive performance over the weekend, concerns remain about the overall strength of the market without the participation of traditional financial institutions.
One user on the X platform expressed their thoughts on Bitcoin, stating, “I am currently looking out for two main scenarios on $BTC. The green path is ideal, where we hold the local highs we broke above and continue up to the major resistance. This will allow me to fill shorts on a number of alts across the board.” They concluded by saying, “The red path is not ideal. If we fail to hold this reclaim, see an ‘early’ breakdown, and the ideal short zones for most alts I’m eyeing up are not met.”