By Omkar Godbole (All times ET unless indicated otherwise)
The outlook for bitcoin (BTC) remains bullish despite a recent pullback to $95,000 from Friday’s highs above $98,000. This dip occurred concurrently with a drop in the total crypto market capitalization, now under $3 trillion.
Recent market signals indicate a strong demand for U.S.-listed spot bitcoin ETFs, which are rapidly absorbing supply. Over the last week, the 11 ETFs registered a cumulative net inflow of $1.8 billion, translating to over 18,500 BTC—six times the 3,150 BTC mined during the same period, as noted by data sources including Farside Investors and HODL15Capital.
On-chain activity also shows promising signs. According to data from IntoTheBlock, the number of active BTC addresses exceeded 800,000 on Sunday. Although this number is still below previous highs, the uptick suggests a renewed interest in on-chain engagement, which often correlates with increased market demand.
In the decentralized finance (DeFi) sector, the occurrence of on-chain transactions involving wrapped bitcoin (WBTC) has increased, doubling since January. This trend highlights growing investor interest in bitcoin-backed decentralized finance solutions.
However, as BTC approaches the $100,000 mark, long-term holders may start to sell, potentially decelerating growth, according to insights from Glassnode.
Switching gears to Ethereum (ETH), data from CryptoQuant reveal that the amount of ETH held by accumulation addresses surged by 22% to 19.04 million ETH in the past two months. Ethereum is also set to implement the Pectra upgrade on Wednesday, which aims to enhance scalability, usability, and validator efficiency, ultimately lowering costs for layer-2 protocols.
From a macroeconomic perspective, the Federal Reserve’s interest rate decision is anticipated on Wednesday. Analysts from ING suggest that current inflation concerns limit the Fed’s ability to ease rates, although recent GDP softness may provide room for adjustments in the second half of the year.
“Volatility is coming,” highlights PowerTrade, emphasizing that the Fed’s decision, along with U.S. ISM services PMI and the Bank of England’s rate decision, are potential catalysts to watch closely this week.
What to Watch
- Crypto Events:
- May 5, 11 a.m.: The Crescendo network upgrade will enhance Kaspa (KAS).
- May 6: The Casper Network (CSPR) will introduce its 2.0 mainnet upgrade.
- May 7, 6:05 a.m.: Ethereum (ETH) will activate the Pectra hard fork network upgrade.
- May 8: Sentencing for Alex Mashinsky, founder of Celsius Network, in New York.
- Macro Indicators:
- May 5, 9:45 a.m.: U.S. April PMI (Composite, Services) data to be released by S&P Global.
- May 7, 7 p.m.: Federal Reserve’s interest rate decision to be announced.
- Earnings Reports:
- May 6: Cipher Mining, pre-market.
- May 8: CleanSpark, post-market.
- May 8: Coinbase Global, post-market.
Token Events
- Governance Votes:
- Uniswap DAO will vote on funding a data-analytics project by Forse.
- Arbitrum DAO will consider diversifying its ARB funds.
- Unlocks:
- Kaspa (KAS) to unlock a portion of its circulating supply on May 7.
- Token Launches:
- May 5: Sonic (S) listed on Kraken.
- May 7: Obol (OBOL) to be listed on major exchanges.
Conferences
CoinDesk’s Consensus is scheduled in Toronto on May 14-16. Use code DAYBOOK for a 15% discount on passes.
- May 6-7: Financial Times Digital Assets Summit (London)
- May 6-8: Stripe Sessions (San Francisco)
Market Movements
- BTC has decreased by 1.27%, currently priced at $94,447.49.
- ETH stands at $1,819.25, down 0.77%.
Conclusion
The bitcoin market shows resilience despite recent fluctuations. With increasing activity from ETFs and growing on-chain engagement, bullish sentiment remains prevalent. Stakeholders should keep a close watch on upcoming events and market indicators to navigate this dynamic landscape effectively.
