Is Bitcoin on the verge of breaking out?

Bitcoin is heading higher, rising above $66k to a five-week high as risk sentiment improves and institutional demand shows further signs of recovering following weeks of outflows.

The world's largest cryptocurrency is trading 2.2% higher over the past 24 hours and 5.5% higher over the past seven days. Bitcoin has rallied 13% in July, a historically strong month for the cryptocurrency.

Middle East Risks  

Risk sentiment across both crypto and traditional financial markets has improved on hopes of a de-escalation in the U.S.-Iran conflict. Mediators are reportedly working to push the U.S. and Iran towards a new ceasefire. While Wall Street closed lower yesterday, U.S. futures point to a firmer start today.

Falling oil prices (on hopes of US-Iran diplomacy) are also easing concerns over the inflation outlook. Combined with cooler-than-expected June U.S. inflation data and a softer June labour market report, lower energy prices could support the view that the Federal Reserve may not need to become more hawkish.

Could tech earnings drive a breakout?

Tech stocks are also rebounding after recent weakness as investors look ahead to earnings from major technology companies this week. 

Amid a quiet U.S. economic calendar, earnings from SK Hynix, Alphabet and Intel could provide a catalyst for Bitcoin. Over the past 30 trading days, Bitcoin has maintained a reasonably strong positive correlation with Nasdaq futures.

That suggests stronger-than-expected earnings could help support a breakout in Bitcoin. However, the relationship isn't strong enough to assume Bitcoin will simply follow AI-related equities. In previous rallies, enthusiasm for AI stocks has at times drawn capital away from crypto rather than supported it.

ETF inflows continue

Meanwhile, U.S. institutional demand is showing further signs of improving. Spot Bitcoin ETFs recorded a fifth consecutive day of net inflows, attracting $226.9 million on Monday. That was the strongest daily inflow since July 6 and the longest run of positive flows in almost three months.

The recent improvement suggests selling pressure is easing rather than signalling a broad return of institutional demand. Bitcoin will likely need to see sustained ETF inflows over the coming weeks if the current recovery is to gather momentum. 

Bitcoin technical analysis

Bitcoin has extended its recovery from $57.7K, the 2026 low, and has now moved above the 50 EMA, while the RSI has also climbed above 50, supporting a constructive near-term outlook. That said, bullish momentum could still be capped by the 100 and 200 EMAs, which remain overhead.

Buyers will look to extend gains towards $67.4K, the mid-June high and falling trendline resistance, followed by the 100-day EMA around $68k. A break above here would bring the 200 EMA near $74k into focus. Above the 200 EMA, the longer-term outlook improves significantly.

Immediate support can be seen at the 50-day SMA around $65,000.

A break below here opens the door to $60k, the psychological level, followed by $57.7k, the 2026 low. Below there, $55k and $50k come into focus, levels last seen in 2024. 

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