Bitcoin Holds Above $100K, Altcoins Slide as Analyst Sees Crypto Rally Into Summer
Bitcoin experienced a temporary pullback on Thursday, with prices briefly dipping below $101,000 before recovering above $103,000. This consolidation followed weeks of significant gains that pushed Bitcoin near record highs. The pullback occurred amidst a backdrop of mixed U.S. economic data. While April retail sales undershot expectations and producer prices rose less than anticipated, jobless claims remained stable, and manufacturing indices indicated softening business activity. Despite this, traditional markets showed resilience, with the S&P 500 rising 0.4% and the Nasdaq remaining flat.
Altcoins experienced a more pronounced decline, with the CoinDesk 20 Index falling 3%, and tokens like Aptos (APT), Avalanche (AVAX), and Uniswap (UNI) dropping by 6-7%. However, analysts downplayed the significance of this short-term correction. Ruslan Lienkha of YouHodler described the pullback as a correction within a broader uptrend, attributing it partly to profit-taking after the recent rally and a moderation in equity market momentum following a delay in China-U.S. tariffs. Kirill Kretov of CoinPanel noted that thin liquidity amplified the impact of even modest sell-offs.
Despite the short-term volatility, long-term indicators remain positive. Vetle Lunde of K33 Research highlighted that Bitcoin recently exited a prolonged period of below-neutral funding rates, a sign of defensive positioning that contrasts with price action observed near previous market peaks. This suggests a lack of excessive speculative froth, potentially paving the way for further price increases.
Interestingly, Steno Research points to a less-noticed driver of the crypto rally: the expansion of private credit in the U.S. and Europe. Unlike previous bull runs fueled by central bank money injections, this rally appears to be supported by increased bank credit growth. Samuel Shiffman of Steno Research forecasts improving global financial conditions through the summer, driven by a weakening U.S. dollar, historically correlated with higher Bitcoin prices. However, he cautions that this positive trend might not extend beyond August.
