Bitcoin beat expectations in May and is now on track for a 12%+ monthly gain.
New interest in crypto ETFs can be credited for the recent surge.
Bullish technical signals suggest that Bitcoin could break the $70,000 resistance in June.
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After starting May on the wrong foot, Bitcoin has defied expectations of a slump and is now poised to close the month with a 12%+ surge.
This positive performance comes after a period of consolidation in the first quarter, where Bitcoin found solid support around $61,000 per week. Although the uptrend was initially halted by selling pressure near $70,000, the last three weeks have seen that resistance zone tested several times.
The recent surge in prices can be largely attributed to renewed interest in crypto ETFs. Since BlackRock’s application for a spot Bitcoin ETF in June, approval and trading of these instruments have been a major driver of Bitcoin’s price. Positive inflows into the latest Bitcoin ETF are seen as a key factor in pushing the cryptocurrency back towards $70,000.
Bullish Signals Emerge for Bitcoin as May Set to Close Strong
Bitcoin's uptrend in the second half of May translated into positive signals on the weekly chart. Most notably, the Stochastic RSI, which had fallen into the oversold zone, reversed direction and started rising again, indicating bullish potential.
This is in line with Bitcoin's price movement in 2024, where the last price reversal found support at the mid-channel band during the rise in the channel. In addition, the price is currently above the 8-week EMA, and the medium and long-term moving averages continue to trend up, further supporting the bullish outlook.
The positive momentum extends to the shorter timeframe as well. Despite trading sideways last week, Bitcoin managed to close each day above $67,000 and remained above the 21-day EMA. This indicates that the cryptocurrency remained on top of its recovery trend throughout May.
Looking ahead to June, Bitcoin appears poised for a fresh up move with support at the $67,000 level. A retest of the $70,000 resistance zone would further strengthen the bullish signals on its technical indicators.
The oversold Stochastic RSI on the daily chart mirrors the weekly chart's uptrend, a technical situation that reinforces bullish sentiment. In addition, the short-term EMA values remain ideally aligned, supporting the bullish outlook in the near term.
What Will Happen in June for Cryptocurrencies?
If the price breaks above the $71,500-$73,000 resistance zone with a clear daily close, the bullish setup based on the last 3-month high and low could push the cryptocurrency to the $77,000-$83,000 range.
However, external factors could disrupt this bullish momentum. Worsening economic conditions outside the cryptocurrency sector could reduce investors’ risk appetite and negatively impact Bitcoin.
Technically, the first line of defense in a potential pullback is at $67,000. A further decline with a daily close below $65,500 would signal a breakout in the short-term uptrend and could see Bitcoin retreat back to $61,000.
Most importantly, Bitcoin needs to maintain its position above the short-term trend on the daily chart to maintain its upward trajectory.
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