Bitcoin Nears $100,000 Mark Driven by Strong Capital Inflows

Bitcoin has been on a steady upward trajectory throughout April, with its price approaching the significant $100,000 mark. This bullish momentum is driven by substantial capital inflows, indicating a strengthening investor sentiment. The Net Realized Profit/Loss metric reflects these inflows, showing that new investors are absorbing the incoming supply while sellers are taking profits. This dynamic suggests that Bitcoin has room for growth, as the realized profits have not yet crossed the $1.5 billion mark, which is typically seen as a bearish indicator.

Since October 2023, the market has maintained a profit-driven regime, with capital inflows consistently exceeding outflows. This steady influx of new capital reinforces the positive sentiment in the market and mirrors the bullish momentum seen during the October 2023 rally. The equilibrium between supply and demand indicates strong market sentiment, signaling that Bitcoin is poised for further gains.

In addition to strong market sentiment, the overall macro momentum of Bitcoin is supported by positive spot ETF flows. These inflows have remained largely positive over the past week, with the exception of May 6, when $85 million in outflows were recorded. This dip was linked to uncertainty surrounding the US Federal Reserve’s decision on interest rates. However, the overall trend in spot ETF flows continues to suggest strong demand, which could help support Bitcoin’s price movement.

Bitcoin’s price is currently trading at $98,827 on the daily chart, just under the critical $100,000 resistance level, marking a two-month high. If the market continues to exhibit strength and investor confidence remains solid, Bitcoin may flip $100,000 into support, paving the way for further gains. The next major target for Bitcoin is $105,000. Breaching this level is crucial for Bitcoin to maintain its momentum and remain firmly in the six-digit range. If Bitcoin manages to secure this level, it could eventually make its way to $110,000, extending the bullish rally.

However, if market conditions take a downturn and investor sentiment weakens, Bitcoin could struggle to break through the $100,000 resistance. In this scenario, the price may fall back to $93,625, invalidating the current bullish outlook and delaying any recovery. The market's ability to sustain the current momentum will be crucial in determining Bitcoin's next move.