BTC Marching Higher

Bitcoin is on watch midweek as the reversal higher in the futures market continues to gather pace. Prices have now eclipsed the $80,185 level which had capped the market since February. A wave of risk-on trading has helped bolster demand for crypto assets recently with BTC seeing soaring ETF demand.

Soaring ETF Demand

Institutional investors had turned away from BTC over Q4 last year fuelling the heavy sell off we saw in BTC. However, following a period of consolidation and muted flows, ETFs are now starting to attract large capital once again, suggesting that BTC has room to continue to rally while the current dynamic remains. His week alone, net BTC inflows have climbed over $500 million. The recent launch of Morgan Stanley's inhouse ETF has proved popular among investors and looks to have helped revive ETF sentiment among investors.

US/Iran Developments

Looking ahead, focus will remain on developments in the Middle East. Risk markets are today cheering news that Trump has paused Project Freedom, with tensions between the US and Iran easing again. There is now a growing view that the US is pushing China to help deliver a deal between it and Iran, possibly ahead of Trump’s meeting with Xi mid-May. If headlines start to reflect better progress in negotiations, this could help drive NTC much higher near-term as risk assets continue to gain favour.

Technical Views

BTC

The rally in BTC has seen the market breaking out above the $80,185 level, now testing above the bull channel highs. $84,530 will be the next big test for bulls which, if broken, opens the way for a much higher run back up towards $94,450 next. The bullish outlook holds while price remains above $80,185 near-term.