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Bitcoin’s price experienced a significant rally this week, reaching a critical resistance level of $104,000 for the first time since February. This surge represents a sharp recovery of nearly 40% from its April lows, sparking a broader rally across the altcoin market. As a result, Bitcoin’s market capitalization has surpassed $2 trillion, while the total cryptocurrency market cap now stands at $3.25 trillion.

Key Drivers Behind Bitcoin’s Rally

Several factors are contributing to Bitcoin’s recent upward momentum:

1. Optimism Over Easing Trade Tensions

Market sentiment has improved amid growing optimism that trade tensions between the United States and other major economies could ease. The U.S. has finalized a trade agreement with the UK, and high-level meetings with Chinese officials are scheduled for this weekend. A resolution to ongoing tariff disputes could act as a positive catalyst for both the stock and cryptocurrency markets.

Such developments are expected to reduce recession concerns, ease inflationary pressures, and increase the likelihood of Federal Reserve interest rate cuts. These conditions create a favorable environment for risk assets like Bitcoin.

2. Upgraded Bitcoin Price Forecasts

Analysts have recently revised their Bitcoin price predictions, reflecting growing bullish sentiment. A prominent financial institution, Standard Chartered, noted that its previous target of $120,000 for Bitcoin was “too conservative.” Additionally, CryptoQuant’s founder, Ki Young Ju, acknowledged a shift in his previous outlook, citing reduced selling pressure and increased institutional demand as key drivers for Bitcoin’s continued growth.

“Two months ago, I said the bull cycle was over, but I was wrong. Selling pressure is easing, and massive inflows are coming through ETFs.”

3. Institutional Inflows Through Spot Bitcoin ETFs

Spot Bitcoin ETFs continue to attract significant capital inflows, with over $40 billion invested since January 2024. In May alone, more than $1.7 billion has been added. Major companies, including Semler Scientific, Strategy, and MetaPlanet, have actively accumulated Bitcoin through these ETFs, further driving demand and price momentum.

4. Shifting Market Sentiment

The Crypto Fear and Greed Index has risen to 70, signaling a shift into the “Greed” zone. Historically, Bitcoin and other altcoins have performed well during periods of heightened investor greed, indicating that sentiment is currently favoring bullish price action.

Bitcoin Price Technical Analysis

From a technical perspective, Bitcoin’s price has demonstrated strong bullish momentum. The weekly chart reveals that BTC bottomed at $79,510 in April and has now achieved five consecutive weeks of gains. Notably, Bitcoin remains above the 100-week Weighted Moving Average, underscoring the dominance of bullish market participants.

Momentum indicators such as the Relative Strength Index (RSI) and the MACD are trending upward, further supporting the bullish outlook. Bitcoin appears poised to retest its all-time high of $109,400. A breakout above this level could confirm bullish continuation, potentially driving the price to the next psychological milestone of $110,000.

Tips for New Crypto Investors

If you’re new to cryptocurrency investing, here are some tips to navigate the market during bullish trends:

  • Do Your Research: Understand the fundamentals of Bitcoin and other cryptocurrencies before investing.
  • Set a Budget: Only invest what you can afford to lose, given the market’s inherent volatility.
  • Use Dollar-Cost Averaging: Gradually accumulate Bitcoin over time to mitigate the impact of price fluctuations.
  • Monitor Market Sentiment: Keep an eye on indicators like the Crypto Fear and Greed Index to gauge market emotions.
  • Secure Your Investments: Store your assets in a reliable wallet to protect against security risks.

As Bitcoin continues its upward trajectory, it’s essential for investors to stay informed, remain cautious, and take advantage of the opportunities presented by the evolving cryptocurrency market.

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