Bitcoin Analysts Express Optimism as Price Nears Resistance Level That Stymied It in May

BTC is approaching the trendline barrier that capped the rally on Monday and into May.

BRN said that Friday’s core PCE data release in the US and Trump’s upcoming Bitcoin conference speech could lead to a stronger rally.

Matrixport noted that Blockchain fundamentals are in an uptrend.

Analysts are becoming increasingly optimistic about Bitcoin’s {{BTC}} price prospects following a rally toward a critical resistance level that capped gains earlier this week.

Since testing the 50-day simple moving average support near $63,500, the leading cryptocurrency has bounced sharply past $67,000, CoinDesk data shows, and is approaching a resistance line defined by the trendline connecting the March and April peaks. The so-called descending trendline proved a tough nut to crack on Monday — and when it last came into focus in May — it has become a level to overcome for bulls.

If analysts’ mood is any guide, that could happen soon.

One trigger could be the US core personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred measure of inflation, scheduled for release at 12:30 UTC (8:30 a.m. ET). Another could be Republican presidential candidate Donald Trump’s upcoming speech at a Bitcoin conference in Nashville.

“The incoming PCE data could be the final nail in the coffin of high interest rates and could lead to rate cut announcements in the near future. Trump’s speech at the Bitcoin conference could lead to a stronger rally if rumors of a national strategic reserve announcement for BTC come true,” Valentin Fournier, a digital asset analyst at consultancy BRN, said in an email.

Fournier added that these factors could push Bitcoin to new highs.

The PCE reading is expected to be almost unchanged in May and rise 0.1% in June after increases of 0.3% in the previous three months, according to FactSet. The annual figure is expected to print 2.4% for June, the smallest increase since 2021.

The Fed’s continued progress toward its 2% target strengthens the case for interest rate cuts by the central bank. Renewed liquidity loosening amid resilient economic growth highlighted in the U.S. on Thursday. GDP data could revive bids for riskier assets, including cryptocurrencies.

Crypto investors are also eagerly awaiting Trump’s speech on Saturday, with speculation all week that he could announce that BTC will take on a larger role in the financial system.

Other factors such as the mining hash rate, which measures the amount of processing power allocated to the network, and the increasing supply of stablecoins are also bullish, according to crypto services provider Matrixport.

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“Bitcoin mining hashrate, a leading indicator for Bitcoin rallies, has improved. Instead of inventory decreasing, Bitcoin inventories continue to increase. The inventory increase suggests confidence in future price increases despite some miners shutting down unprofitable machines,” Matrixport said in a note to clients on Friday.

Matrixport also noted that inflows from fiat to crypto are increasing, as evidenced by the recent increase in the market value of the stablecoin sector.

“Historically, such increases indicate a bull market and indicate a shift of funds from traditional financial markets to the crypto sector,” it said.