4 reasons why Bitcoin was a buy below $70K

Bitcoin ( BTC ) rose above the $70,000 mark for the first time in six weeks. Here’s why you should have bought the Bitcoin dip below $70,000.

Bitcoin funding rates rise to 6-week highs

Bitcoin rose to a six-week high of $71,401 on May 20, a price level not seen since April 9, according to TradingView .

BTC/USDT. 1-day chart. Source: TradingView

As Bitcoin recovered above the $70,000 psychological mark, the funding rate has also started rising. Bitcoin’s funding rate rose to 0.0187%, the highest level since April 9, according to Coinglass , suggesting that most traders are long BTC. 

Bitcoin perpetual futures average 8-hour funding rate. Source: Coinglass

Essentially, a positive funding rate indicates a preference for leverage being used by traders assuming long Bitcoin positions (buyers).

Before Bitcoin’s rally to $70,000, funding rates have stayed below the 0.01% mark for the past month, suggesting that Bitcoin buyers are becoming more confident.

BTC price technicals favor more upside

Fueling investor confidence, the 4-hour Bitcoin chart has recently printed an inverse head and shoulder pattern, used by traders to identify a trend reversal from bearish to bullish.

Bitcoin’s inverse head and shoulders pattern could signal more upward momentum, according to popular crypto analyst Moustache, who wrote in a May 21 X post :

“I told you yesterday that we see a big green candle for $BTC. I hope you were listening? Never fade an inverse head and shoulders pattern. Altcoins will follow.”

BTC/USD, inverse head and shoulders formation. Source: Moustache

Related: Bitcoin ETFs are ‘orange FOMO poker chips’ that siphon on-chain funds back into TradFi

Bitcoin chart fractal mirrors hi

Fractals refer to technical chart patterns that repeat on multiple timeframes and charts, regardless of how far traders zoom out on the underlying asset’s price action.

From a fractal analysis perspective, Bitcoin’s current rally on the weekly chart looks similar to its rally in November 2021, when BTC rose from $31,000 in July to $69,000 in November.

If chart patterns were to repeat, Bitcoin could have more upside momentum in the coming weeks.

BTC/USDT. 1-week chart. Source: TradingView

Moreover, Bitcoin’s price trajectory is also similar to the 2017 bull run, according to popular crypto analyst Jelle, who wrote to his over 81,000 followers in a May 21 X post :

“Bitcoin continues to follow the same route as 2017's bull run. Turbulent air around the previous cycle highs - but once we clear this pocket, smooth sailing.”

BTC/USD, 2017 compared to 2024. Source: Jelle

Bitcoin ETF flows turn positive

Additionally, institutional inflows into United States' spot Bitcoin exchange-traded funds (ETFs) saw two consecutive weeks of positive inflows, after three weeks of net negative outflows.

The U.S. Bitcoin ETFs amassed over $200 million worth of Bitcoin during the previous week, and over $413 million on the week of May 6, according to Dune .

Bitcoin ETF Net Flows, Weekly. Source: Dune

On May 20, Bitcoin ETFs saw positive inflows worth over $235 million, more than the net inflows of the previous week, according to Farside Investors data .

Bitcoin ETF Flow Table. Source: Farside Investors

Institutional inflows from ETFs were a significant part of the current Bitcoin rally to new all-time highs. By Feb. 15, Bitcoin ETFs accounted for about 75% of new investment in the world’s largest cryptocurrency as it surpassed the $50,000 mark.

Related: Ether ETFs could drive ETH price to $10K, but approval could take until 2025

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.