The cryptocurrency market added a mere 0.7% in 24 hours, but an important 5% in seven days to $3.5 trillion. This increase is important as it falls in the area of the market peaks reached in December and January.
The sentiment index jumped to 78, last seen in January, confirming a similar situation to what we saw earlier in the year.
Bitcoin repeated highs on Thursday evening, rising to $111.8k and pulling back slightly to $110.5k by Friday morning. The rise was attributed to the advancement of stablecoin legislation, capital inflows into 12 U.S. ETFs of about $4.2 billion in May, purchases by Strategy, which has accumulated more than $50 billion worth of tokens, and U.S. fiscal concerns. Unlike previous BTCUSD rallies, the current upward movement is not solely driven by momentum, but by increased demand and White House loyalty.
Ethereum continues to struggle for the 200-day moving average at $2650. This is also the area of February’s protracted consolidation and the important pivot level from August to October last year. A break of current resistance could kick-start a rally to $4000.
The Democrats have dropped their opposition, and the Senate will soon consider the Stablecoin legislation. It would place tighter restrictions on money laundering, improve consumer protections, and unify business rules for U.S. and foreign companies.
Fiscal concerns are weakening the dollar and pushing up Treasury bond yields. According to Galaxy Digital, it is becoming increasingly dangerous to invest in a country with such huge debts. Investors are looking for alternatives and are finding them in Bitcoin. No wonder the paths of BTCUSD and the S&P 500 have diverged.
