Bitcoin Eyes Major Breakout as ETF Cost Basis Fuels Support

Bitcoin has begun the new week on a strong note, showing a decent increase of nearly 2% in its price, but the on-chain metrics suggest that it may be headed for a bigger price move.

According to a recent chart showcased by crypto analytics platform CryptoQuant, Bitcoin has rebounded from a crucial support zone driven by institutional inflows, flashing early signs of a potential breakout. 

Source: Cryptoquant

Bitcoin to deviate from past cycle bottoms

The chart showcased on Monday, May 4, revealed that Bitcoin has found support around the average cost basis of investors who entered the market during the early days when spot Bitcoin ETFs were officially approved.

While this was majorly made up of institutional investors, the price of Bitcoin has stabilized and bounced from that level in recent weeks.

While there were no Bitcoin ETFs in previous market cycles, where momentum was majorly dependent on retail investors and speculative traders, this cycle might come with an extremely different pattern.

With Bitcoin gaining support around the average cost basis of large-scale capital inflows, the current structure provides different insight about Bitcoin's market bottom.

Where's Bitcoin headed?

The chart showed Bitcoin declining towards the early ETF cost basis, after which it made a sharp price recovery, suggesting that buyers are aggressively stepping in at that key zone as institutional investors appear to be accumulating around that level.

While there are still signs that Bitcoin might be yet to hit its bottom, the strong support driven by the ETF demand could alter the tendencies of further severe corrections.

Hence, the asset may see a major price breakout soon if the ETF demand could drive momentum for a bigger price move.