Price analysis

Bitcoin remains stuck inside a range, but solid inflows into spot ETFs suggest investors anticipate an upside breakout.

Bitcoin (BTC) is trying to build upon its gains above the psychological support of $70,000. The sentiment received a boost after the spot Bitcoin exchange-traded funds recorded the second highest inflows of $887 million on June 4, per Farside Investors data.

Analysts are closely watching next week’s United States Consumer Price Index (CPI) data. After the 0.1% drop in the CPI data on May 15, Bitcoin started a 7% rally over the following five days. 10x Research head of research, Markus Thielen, believes that if the year-on-year CPI is 3.3% or lower, it could propel Bitcoin to a new all-time high.

Fidelity Investments head of digital asset strategies Matt Horne said in a June 4 CNBC report that investors should consider a 1-5% allocation to Bitcoin. Such an investment will minimize risk even if Bitcoin were to go to zero, but it will benefit the portfolio if Bitcoin continues its uptrend.

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Bitcoin and Ether may spend more time inside a range before starting a trending move.

Bitcoin (BTC) has been range-bound for several days, indicating a tussle between the bulls and the bears for supremacy. Trading firm Mosaic Asset believes that “loosening financial conditions” could boost a risk-on trade, and Bitcoin could be on the verge of a breakout to the upside.

CryptoQuant founder and CEO Ki Young Ju said in a post on X that Bitcoin remained near $10,000 for six months in 2020 with high on-chain activity before skyrocketing to $64,000 in 2021. A similar trend was being seen in 2024, with “$1B added daily to new whale wallets, likely custody.”

Although a breakout has eluded Bitcoin, the bulls have achieved nearly an 11% rally in May. That is the first positive close after three years of negative monthly performance in May. That gives positive momentum to the buyers to extend the bullish performance in June.

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Bitcoin ETF inflows show that the investors are using the current consolidation to accumulate.

Bitcoin (BTC) remains in sideways price action, but a positive sign is that the investors have continued to buy the spot Bitcoin exchange-traded funds. Farside Investors data shows net positive inflows into the ETFs for the past 11 days. 

CoinShares data shows that Bitcoin investment products saw more than $1 billion in inflows last week. Along with institutional investors, whales also seem to be accumulating Bitcoin. Glassnode analysts said in The Week On-chain report that long-term investors were “beginning to re-accumulate coins for the first time since Dec 2023.”

According to the Securities and Exchange Commission filings, more than 600 United States investment firms have invested in spot Bitcoin ETFs since January. The ETFs have bought 855,619 Bitcoin since launch, with an average of 6,200 Bitcoin per day.

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The spot Ether ETFs approval by the SEC has failed to start a rally in Ether and Bitcoin, but this could change after a few weeks.

The United States Securities and Exchange Commission (SEC) greenlighted  several spot Ether exchange-traded funds on May 23, but the decision failed to ignite Ether (ETH) or the crypto markets. Does this mean that the ETF decision was already priced in? It is difficult to judge by the initial reaction because Bitcoin’s (BTC) price had also dipped just after the approval of the spot Bitcoin ETFs. However, the price turned around after a few days and skyrocketed to a new all-time high.

The approved spot Ether ETFs are expected to launch by mid-June, according to Bloomberg ETF analyst Eric Balchunas. He projects the Ether ETFs to garner roughly 10-15% of the inflows seen by the Bitcoin ETFs. Once money starts flowing into Ether ETFs, the spot market is likely to respond favorably.

Although Bitcoin remains stuck in a sideways price action, Fundstrat Global Advisors managing partner and head of research Tom Lee remains uber bullish. In an interview with CNBC, Lee said their base case for Bitcoin by the end of the year is $150,000.

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