‘Crypto spring’ is here, says one analyst after bitcoin's key signals turn bullish

Standard Chartered's head of digital assets research Geoffrey Kendrick says bitcoin BTC$66,541.38 may have already put in its low for the current market cycle, arguing that a combination of improving investor flows, corporate buying and easing macroeconomic pressures points to a stronger recovery ahead.

The latest call marks a shift in sentiment after several months in which crypto markets struggled with rising geopolitical tensions, concerns about inflation and persistent outflows from U.S. spot bitcoin exchange-traded funds (ETFs.)

Last Friday, Kendrick told clients he believed bitcoin's decline to roughly $59,000 represented the cycle low. At the time, however, he outlined three developments he wanted to see before gaining more confidence in that view: renewed bitcoin purchases by Strategy (MSTR), a return to positive ETF inflows and continued weakness in oil prices.

By Monday, all three had materialized.

Strategy, the largest corporate holder of bitcoin, disclosed that it purchased another 1,587 BTC last week. U.S. spot bitcoin ETFs posted net inflows of $86 million on Friday after a stretch of notable redemptions. Oil prices also continued to move lower, reducing concerns that higher energy costs could push inflation and bond yields upward.

"Winter is over. Welcome back to crypto Spring," Kendrick wrote.

The ETF trend has attracted particular attention. Spot bitcoin ETFs have become one of the most important sources of demand for the cryptocurrency since their U.S. launch in January 2024. Kendrick noted last week that recent selling had been among the sharpest since the products debuted, suggesting some investors may have been raising cash to participate in the anticipated SpaceX (SPCX) IPO, though he described that explanation as anecdotal.

The broader backdrop for crypto has also improved. Last month, easing regulatory barriers for crypto derivatives in the U.S. and growing institutional participation helped support sentiment. Crypto exchange Kraken, earlier today, launched perpetual futures to U.S. clients, joining a list of companies to offer the newly-popular derivatives product onshore.

Meanwhile, bitcoin has continued to attract treasury allocations from public companies seeking exposure to the asset.

Still, Kendrick said one major test remains.

Market observers have pointed to bitcoin's pattern of making lower highs during recent rallies. To invalidate that concern, he said bitcoin needs to break above the $83,000 level reached in early May. The asset currently stands at $66,300 as press time, up about a percent over the past 24 hours.

Coinbase CEO Brian Armstrong said on Monday that he too believes bitcoin may have already bottomed near $60,000 and that he remains "as bullish as ever" on the cryptocurrency.

If it does, Kendrick believes the case that a new uptrend is underway will become much stronger.