Short Squeeze Exploded…Is Bitcoin Catching Fire Again?

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As Bitcoin reclaimed $80,000, institutional funds poured back in, indicating that the market has entered a 'typical recovery rally' phase.

According to investment media FXStreet on May 5 (local time), as Bitcoin (BTC) recovered $80,000, US Bitcoin spot ETFs saw a net inflow of $532.21 million in a single day. This marks the third consecutive trading day of net inflows, indicating a strengthening of institutional demand.

In detail, BlackRock's iShares Bitcoin Trust recorded the largest inflow with $335.49 million, followed by Fidelity Fund with $184.57 million. Morgan Stanley ETF also recorded an inflow of $12.16 million, while other products saw no capital inflows. This trend is significant as it represents a rebound after $490.63 million flowed out over the preceding three days.

Bitcoin is currently trading at around $81,029, up 1.5% over 24 hours. BitUNIX analysts interpreted this rise as a 'rebound due to renewed preference for risk assets following the US-Iran ceasefire.' Specifically, a short squeeze (buying pressure caused by covering or liquidating short positions) occurred in the $79,500-$81,000 range, strengthening upward momentum, and the $77,000-$78,000 range has formed a new support level.

However, the market variable remains the macroeconomic environment. Geopolitical tensions have re-emerged as the US launched 'Operation Liberation,' deploying 15,000 personnel to the Strait of Hormuz, which is identified as a factor that could disrupt the ceasefire. Concurrently, the US non-farm payroll data and Federal Reserve statements to be released this week are considered key variables that will determine the direction of risk assets overall.

Ethereum (ETH) spot ETFs also showed a rebound trend. $61.29 million flowed in a single day, and cumulative net inflows exceeded $12 billion. The market now views cryptocurrency prices as having transitioned into a phase where not just internal supply and demand, but also 'macro variables and liquidity structures' are simultaneously at play.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*