Key takeaways:<\/p>\n
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Bitcoin\u2019s price is retracing, but strong ETF inflows, high network activity and whale accumulation suggest BTC is on track to $140,000.<\/p>\n<\/li>\n
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Spot Bitcoin ETFs saw $2.9 billion in net inflows in two weeks, mirroring past rallies.<\/p>\n<\/li>\n
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Declining exchange balances and a rising transaction volume Z-score suggest increasing overall demand.<\/p>\n<\/li>\n<\/ul>\n
Bitcoin (BTC<\/a>) price was down 1.4% over the last 24 hours. It traded 6% below its all-time high of $109,000<\/a>, reached on Jan. 20. Nevertheless, several fundamental, onchain and technical metrics suggest that Bitcoin\u2019s upside is not over.<\/p>\n
Bitcoins Spot Bitcoin ETF inflows mirror past BTC rallies<\/h2>\n
Bitcoin\u2019s latest recovery<\/a> was accompanied by strong investor appetite for spot Bitcoin exchange-traded funds<\/a> (ETFs), which recorded $2.9 billion in net inflows over the last two weeks.<\/p>\n
The chart below shows that after the launch<\/a> of the US-based spot Bitcoin ETFs in January 2024, these investment products saw net inflows of about $8.5 billion between Feb. 13, 2024, and March 13, 2024, peaking at a record single-day inflow of $1.045 billion on March 12, 2024.<\/p>\n
Spot Bitcoin ETF flows. Source: Glassnode\u00a0<\/em><\/figcaption><\/figure>\n Similarly, between Nov. 6, 2024, and Dec. 16, 2024, cumulative daily inflows hit $5.7 billion, aligning with Bitcoin\u2019s 60% rally from $67,000 to $108,000 over the same period.\u00a0<\/p>\n
If ETF inflows continue, Bitcoin is likely to resume its uptrend toward new all-time highs<\/a>.\u00a0<\/p>\n
Bitcoins Bitcoin market volatility index: risk-on<\/h2>\n
Increased inflows<\/a> into spot Bitcoin ETFs signal high risk-on sentiment, as evidenced by\u00a0a drop in the CBOE Volatility Index (VIX), which measures 30-day market volatility expectations.<\/p>\n
Bitcoin network economist Timothy Peterson highlighted<\/a> that the VIX index has dropped substantially to 18 from 55 over the past 25 trading days.<\/p>\n
A VIX score below 18 implied a \u201crisk-on\u201d environment, favoring assets like Bitcoin.\u00a0<\/p>\n
The analyst said:<\/p>\n
\u201cThis will be a ‘risk on’ environment for the foreseeable future.\u201d<\/p><\/blockquote>\n
CBOE Volatility Index. Source: <\/em>Timothy Peterson<\/em><\/a><\/figcaption><\/figure>\n Peterson\u2019s model, which has a 95% tracking accuracy, predicted a $135,000 target<\/a> within the next 100 days if the VIX remains low.<\/p>\n
Bitcoins Strong Bitcoin accumulation continues<\/h2>\n
Reinforcing the risk-on sentiment are Bitcoin whales, who have been increasing their holdings even as the price rallied. Glassnode data shows<\/a> the Bitcoin Accumulation Trend Score (ATS) at 1 (see chart below), which signifies intense accumulation by large investors<\/p>\n
According to Glassnode, the spike in trend score indicates a transition from distribution to accumulation across almost all cohorts. This shift mirrors a similar accumulation pattern observed in October 2024, which preceded Bitcoin\u2019s rise from $67,000 to $108,000, spurred by US President Donald Trump\u2019s election victory<\/a>.<\/p>\n
Bitcoin accumulation trend score. Source: Glassnode<\/em><\/figcaption><\/figure>\n Additional data from Santiment reveals that addresses holding between 10 BTC and 10,000 BTC have accumulated 83,105 more BTC in the past 30 days.<\/p>\n
In a May 13 post on the X social platform, Santiment said<\/a>,<\/p>\n
\u201cWith the aggressive accumulation from these large wallets, it may be a matter of time until Bitcoin’s coveted $110K all-time high level is breached, particularly after the U.S. and China tariff pause.\u201d<\/p><\/blockquote>\n
Bitcoin 10-10,000 BTC chart holdings. Source: <\/em>Santiment<\/em><\/a><\/figcaption><\/figure>\n Overall, this is a positive sign as continued accumulation signals bullish sentiment among this cohort of investors.<\/p>\n
Related: <\/strong><\/em>Bitcoin looks \u2018ridiculous\u2019 as bulls attempt $2T market cap flip \u2014 Analyst<\/strong><\/em><\/a><\/p>\n
Bitcoins Declining Bitcoin balance on exchanges<\/h2>\n
BTC balance on exchanges reached a six-year low of 2.44 million BTC on May 15. According to the chart below, more than 110,000 BTC have been moved off exchanges over the last 30 days.\u00a0<\/p>\n
BTC reserve on exchanges. Source: CryptoQuant<\/em><\/figcaption><\/figure>\n Decreasing BTC balances on exchanges means investors could be withdrawing their tokens into self-custody wallets, indicating a lack of intention to sell in anticipation of a future price increase.<\/p>\n
Bitcoins Increasing network activity<\/h2>\n
Bitcoin\u2019s potential to rise is supported by increased network activity, as highlighted<\/a> by crypto investor Ted Boydston in a May 15 post on X.\u00a0<\/p>\n
The Bitcoin transaction volume Z-score measures the difference between the current transaction volume and the average. It is often used to gauge network activity and market interest.<\/p>\n
The chart below shows the metric has risen sharply from the negative zone and is approaching 1. A rising transaction volume Z-score, especially when it approaches or exceeds 1, is historically associated with Bitcoin price rallies.<\/p>\n
\u201cThis is a good sign for Bitcoin price acceleration,\u201d remarked Boydston, adding:<\/p>\n
\u201cBitcoin should be full bull once the Z-score breaches 1.\u201d<\/p><\/blockquote>\n
Source: <\/em>Ted Boydston<\/em><\/a><\/figcaption><\/figure>\n Bitcoins BTC rounded bottom pattern targets $140K<\/h2>\n
From a technical perspective, Bitcoin\u2019s price has formed a rounded bottom chart pattern on the daily chart (see below). Bulls are now focused on pushing the price above the neckline of the governing chart pattern at $106,660.<\/p>\n
A daily candlestick close above this level would confirm a bullish breakout from the rounded bottom formation, ushering BTC into price discovery with the technical target set at $140,000, or a 37% increase from the current level.<\/p>\n
BTC\/USD daily chart. Source: <\/em>TradingView<\/em><\/a><\/figcaption><\/figure>\n The relative strength index<\/a>, or RSI, is at 70, and a bullish cross from the SMAs suggests that the market conditions still favor the upside, which can top out at even higher than $140,000. <\/p>\n
As Cointelegraph reported, BTC price had broken out of a bull flag in the weekly timeframe, projecting a rally to $150,000<\/a>.<\/p>\n
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.<\/p>\n