Crypto markets are not providing any return opportunities for intraday traders, but long-term market observers say the market is in a coiling position and key levels must be monitored for movements in both directions.
Nick Rak, director of LVRG Research, said that the change in market sentiment reflects the notion that pricing has been influenced by trade tensions and strains on risky assets.
"Although the U.S. economy is showing signs of contraction, investors are optimistic about technology, particularly the future outlook for Bitcoin, as institutions continue to integrate more with the industry," Rak said, noting that despite inflation risks and uncertain macro policies, the long-term trajectory for the crypto market remains positive.
Last week's price movement of Bitcoin is telling. According to Fineqia research analyst Matteo Greco, BTC ended the week near $105,700, which is a 3.1% decrease from the previous week's close of around $109,050. After six consecutive weeks of investment, the first negative print saw a net outflow of $150 million from BTC spot ETFs.
"BTC reserves on the exchange continue to decline, while reserves of major altcoins like ETH and XRP have stabilized," Greco wrote in an email to CoinDesk.
He also added that the stablecoin reserves on the exchange have reached their highest levels year over year, which is a sign that investors are preparing to establish new capital rather than exiting the market.
Greco further stated that Bitcoin's market value-to-real value (MVRV) ratio is currently around 2.2, which is below the historical maximum threshold of 3.7. This means we are in the later stages of the cycle—but not at the top yet.
Bitunix analysts referred to the Fed's dirty comments as a short-term move to increase risk appetite, although they warned that dollar volatility could disrupt flows.
"The short-term key level for Bitcoin is $105,000," he said. "If it can hold above this level, it may rise further. Conversely, if the market turns back towards risk aversion, the key support level of $102,700 must be defended."
Thus, analysts say that if Bitcoin's dominance starts to fade, which has historically been a sign of late-cycle rotation, altcoins could gain momentum, marking the next inning of a bull market.
As the reserves of stablecoins increase and institutions integrate Bitcoin into their strategies, traders are preparing for a volatile but potentially profitable summer.
We expect positive trends for the crypto market to continue in the long term,” said Rak of LVRG.