Bitcoin rose on Tuesday, reclaiming the USD 80,000 level and reaching its highest point in several months, supported by strong institutional inflows and improving regulatory clarity.
The progress on the CLARITY Act was a key driver as US lawmakers reached a compromise on stablecoin rewards, addressing concerns from traditional banks while preserving innovation within the crypto ecosystem.
ETF flows reacted to the constructive backdrop. Spot Bitcoin ETFs recorded USD 532 million in inflows on Monday, bringing total inflows for the first two sessions of May above USD 1.1 billion. If sustained, investment flows could drive the cryptocurrency to new highs.
In the meantime, short position liquidations have been more than double long liquidations over the past 24 hours, indicating a continued squeeze on bearish positioning, supporting upward price action in the short term.
However, risks remain as escalating tensions in the Middle East continue to drive inflation concerns and support global bond yields, which can weigh on non-yielding assets. While the cryptocurrency could continue to recover, further geopolitical deterioration could limit upside and reintroduce volatility.
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