5 min read Bitcoin is falling slightly on Thursday, edging away from a three-month high as investors await the next catalyst.
Bitcoin has slipped from 82.8k yesterday to below 81k, trading 0.5% lower over the past 24 hours. However, the price is still up more than 6.5% in May so far, adding to gains of 12% in April.
US – Iran deal hopes rise, lifting risk sentiment
Bitcoin, together with other risk assets, has benefited from optimism surrounding a de-escalation in the Iran war. Hopes are rising that the conflict in the Middle East could end soon and that the Strait of Hormuz could reopen after both the US and Iran said negotiations are progressing well.
Reports are circulating that the two sides are nearing a deal, which has sparked a pullback in oil prices, with Brent down to $100 per barrel, calming inflation fears. US equities have also benefited with the S&P 500 and the Nasdaq trading at record highs.
Despite some profit-taking today, Bitcoin holding above 80k means that profit metrics have turned positive, suggesting that market conditions could be stabilising.
Market conditions improve
The True Market Mean at 78.2k and the Short-Term Holder Cost Basis at 79,100 confirm such a shift. These levels represent the average cost price of actively traded supply alongside tokens moved within the last 155 days.
However, a report from Glassnode also points to long-term holders beginning to take advantage of improved prices. Realised profits from tokens held for over a year have risen to $180 million per day on a 14-day moving average, a level comparable to distribution phases seen in the past.
That said, on the institutional side, BTC ETFs are seeing renewed demand, which is helping to absorb supply. BTC ETFs recorded a fifth straight day of net inflows, taking total net inflows across the week to $1.05 billion, the highest level since mid-January.
Markets will continue to monitor U.S.-Iran developments, while also turning attention to tomorrow’s US non-farm payroll report, which is expected to show a resilient labour market despite the ongoing energy shock.
Ethereum fails to sustain $2400 & unstaking soars
Despite staging a solid recovery from the February 1950 low, Ethereum has failed to sustain gains above 2,400 and is lagging behind some of its peers.
Ethereum has posted smaller gains than Bitcoin, rising 7% in April and gaining just 3% since the start of May, suggesting that capital has favoured BTC.
Notably, institutional flows tell a similar story. Data from SoSoValue shows Ethereum ETFs bought just $355 million in April, well below Bitcoin’s $1.97 billion.
Attention is also shifting to Ethereum’s exit queue. Over the past two weeks, ETH unstaking demand has surged by almost 72,000%, adding another layer of caution to Ethereum’s outlook.
As a result, Ethereum’s momentum could be starting to lean bearish.
Ethereum technical analysis
Ethereum trades in a rising channel dating back to early February. The price has pushed above its multi-month falling trend line dating back to the October highs last year, while the 50 SMA has moved above the 100 SMA in a light-touch golden cross signal. However, the price has stalled around the 2,425 mark as momentum starts to slow.
Should momentum pick up, buyers will look towards 2,500, the 23.6% Fibonacci retracement level from the 4,955 high to the 1,730 low. A rise above here exposes the 200 SMA at 2,685 before bringing 3,000, the psychological level, into focus.
Should momentum continue to fade, support can be seen at 2,230, the 50 SMA, ahead of 2,160, the confluence of the 100 SMA and the lower band of the rising channel. Below here, 2,000 comes into focus on the downside — the April low and a key psychological level.
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