Key Takeaways
Bitcoin (BTC) held the $80,000 mark on May 5 after the Crypto Fear & Greed Index registered a “Neutral” reading for the first time since January, reflecting a significant shift in investor confidence.
"The crypto market recorded over $302 million in short liquidations today," according to data from CoinGlass, as a rally caught over-leveraged bearish traders by surprise among the approximately 110,000 traders liquidated in the last 24 hours.
The move was supported by a 114 percent rise in Bitcoin's 24-hour trading volume and approximately $630 million in net inflows for spot Bitcoin ETFs on the last trading day, signaling renewed institutional demand. The total crypto market cap climbed almost 2 percent to $2.61 trillion, with Bitcoin's dominance holding at 60.44 percent, per data from Binance Alpha.
Traders are now watching for the Federal Open Market Committee (FOMC) meeting on May 6-7 and the CLARITY Act's May 31 Senate deadline as the next key events that could determine if the rally can break the $2.62 trillion market cap swing high.
The shift in sentiment follows a period of intense selling pressure. The improved reading on the index, which now sits at 45, comes after advances for the long-awaited CLARITY Act were signaled by White House crypto adviser Patrick Witt, with lawmakers targeting a markup in May. Easing geopolitical tensions also contributed to the rally, encouraging short squeezes across the market.
Bitcoin surpassed a 24-hour high of $80,596 before retracing to trade at $79,845 as of 14:30 UTC. The rally was not isolated, as major altcoins including Ethereum (ETH), XRP, and Dogecoin (DOGE) also posted notable gains. However, a report from Binance Alpha noted the rally on declining total volume, which fell 2.61 percent to $129.14 billion, suggesting the move may lack broad participation.
Market experts pointed to several technical and on-chain indicators supporting a potential market bottom. Blockstream CEO Adam Back highlighted the Bitcoin 200-week moving average surpassing $60,000 as a historically bullish signal. This follows analysis from Grayscale Research which suggested Bitcoin may have bottomed in the $65,000-$70,000 range.
This article is for informational purposes only and does not constitute investment advice.
