Author: Matt Crosby, Bitcoin Magazine; Translation: Tao Zhu, Gold Finance

Since breaking through the $60,000 mark, Bitcoin has been steadily climbing and is currently hovering near the $70,000 level, a price that has not been reached in several months. As market sentiment warms up, investors are wondering if Bitcoin has the strength to reach new all-time highs or if it will struggle to break through key resistance levels.

Healthy Sentiment

The Fear and Greed Index is a useful tool to understand market sentiment and how traders perceive Bitcoin's trend. Currently, the index is around 70, indicating a 'greedy' level, which historically has been seen as a positive signal, but the distance may suggest that there is still a considerable way to go before potential market top extreme greed levels. The index measures market sentiment, with lower levels indicating fear and higher levels indicating greed. Typically, when the index exceeds the 90+ range, the market becomes overly bullish, raising concerns of over-extension.

Figure 1: Fear and Greed Index shows healthy positive sentiment.

It is worth noting that last year, when the Fear and Greed Index reached similar levels, Bitcoin's trading price was around $34,000. Since then, in the following months, it more than doubled to reach $73,000.

Key Support

Short-term holders have realized the average price paid for their bitcoin by new bitcoin investors. It is crucial because it often acts as strong support during bull markets and as resistance during bear markets.ResistanceCurrently, the price is around $62,000, and bitcoin has successfully held above this price. This is a hopeful sign as it indicates new market participants are profiting, and bitcoin is holding above critical support levels. Historically, breaking below this level has led to market weakness, so maintaining this support is key to any sustained rebound.

Figure 2: Price realized by short-term holders has been reclaimed.

We have seen this dynamic in previous cycles, especially during the 2016-2017 bull market when bitcoin retraced to this level multiple times before continuing its ascent. If this trend continues, the recent breakthrough in bitcoin may lay the foundation for further upward movement.

Market Stability

One area traders often focus on is the funding rate, which indicates the cost of holding long or short positions on bitcoin futures. Over the past few months, funding rates have been fluctuating, swinging between overly optimistic long positions and overly pessimistic short positions. Fortunately, the market has now stabilized, with funding rates at neutral levels. This is a healthy sign as it shows traders are not overly leveraged in either direction.

Figure 3: The futures market has been deleveraged and returned to a healthy level.

In the neutral zone, the risk of cascading liquidation is relatively small, which is a common occurrence when excessive leverage positions are eliminated, leading to a sharp market decline. As long as the financing interest rate remains stable, bitcoin can have the breathing room needed for continued upward movement without significant fluctuations.

A difficult path towards $70,000 and above.

Despite market sentiment andtechnical aspectsindicating bitcoin is in a healthy state, there are still significant resistance levels above. Firstly, the current resistance trendline is a resistance line that bitcoin has been struggling to break through. This descending trendline has been tested multiple times, but each time, bitcoin retraces after touching the line.

In addition, bitcoin faces some additional obstacles, such as $70,000. This level has been a resistance level in the past, representing a psychological level that traders may closely watch. Beyond this, the historical high points are between $73,000 and $74,000. Breaking through this level will be an important bullish signal, but bitcoin may need multiple attempts to clear this level.

Figure 4: Bitcoin faces significant resistance at $70,000 and above.

A positive technical factor is the recent recapture of the 200-day moving average. This is a key level that investors should pay attention to, as this level has been a resistance level for Bitcoin in the past few months.

Macro Environment: Institutional and ETF Inflows.

Goodix Technology (603160.SH)technical indicatorsFurthermore, the macro environment is becoming increasingly favorable for Bitcoin. Institutional funds continue to flow into Bitcoin exchange-traded funds (ETFs). Over the past few days, over $1 billion has flowed into Bitcoin ETFs, reflecting growing confidence in the asset. In the past weeks, we have seen inflows of hundreds of millions of dollars into ETFs, indicating smart money, especially institutional investors, bullish on the future of Bitcoin.

Figure 5: Bitcoin ETF has recently seen a large inflow of funds.

This is important because institutions often focus on the long term, providing a more stable support base than individual speculation. In addition, with the recent rise in the stock market and even gold over the past few months, Bitcoin seems to be slightly lagging behind. This may lay the foundation for the rise of Bitcoin, especially if investors shift from traditional assets to the riskier Bitcoin sector.

Conclusion

The price trend, financing rates, and sentiment of Bitcoin all indicate a healthier market compared to the past few months. Institutional inflows into ETFs and improvements in the macro environment further drive the bullish sentiment. However, there are significant resistance levels ahead, and any rebound may face challenges before Bitcoin truly breaks to new highs.