Bitcoin's Retreat from $108K: Bullish Momentum Persists Amid Institutional Adoption

Bitcoin briefly surged past $108,000 during Wednesday's trading session before retreating to $107,446.08 by 4 p.m. ET, marking a slight 0.37% decline from earlier highs yet maintaining a 0.17% 24-hour gain. This price action reflects heightened volatility as the cryptocurrency market capitalization reached $3.31 trillion, nearing a critical threshold identified by FxPro analyst Alex Kuptsikevich, who noted that levels between $3.40 trillion and $3.55 trillion historically trigger increased selling pressure. Despite the pullback, bullish sentiment remains robust, fueled by institutional adoption catalysts such as the Federal Housing Finance Agency's directive under Bill Pulte for Fannie Mae and Freddie Mac to consider cryptocurrency holdings in mortgage assessments—a move poised to deepen BTC's integration into traditional finance.

ETF Inflows and Macro Catalysts Drive Optimism

Spot Bitcoin ETFs recorded a substantial $548 million net inflow, extending a 12-day streak of positive flows and underscoring sustained institutional demand. Concurrently, Japanese firm Metaplanet bolstered its BTC treasury with an additional 1,234 coins, while Nasdaq-listed Bit Digital announced a strategic pivot toward Ethereum staking, highlighting ETH's growing appeal at $2,473.17. Macroeconomic tailwinds amplified the bullish case, with the Federal Reserve advancing plans to ease bank capital requirements—potentially enhancing liquidity for risk assets like BTC. Upcoming U.S. economic data releases, including May's Core PCE Price Index (estimated 2.6% YoY) and Q1 GDP revisions, could further influence crypto valuations as traders monitor inflation and growth signals for Fed policy clues.

Technical Indicators and Derivatives Signal Trading Opportunities

Technical analysis reveals a bullish setup for the BTC/BCH pair, with the 50-day simple moving average approaching a golden cross above the 200-day SMA—a classic long-term buy signal. Derivatives data showed CME's Bitcoin futures open interest climbing to a four-week high of 159,850 BTC, though a flat basis below 10% indicated cautious positioning. Altcoins displayed mixed performance: BCH gained 2.24% to $502.00 amid rising open interest, while PEPE and XMR also saw increased derivative activity. Ethereum's risk reversals on Deribit maintained a slight put bias, suggesting hedges against potential downside, yet ETH's resilience above $2,400 offers swing-trading entry points. The Fear and Greed Index held at 74, just shy of extreme greed, reinforcing the need for disciplined risk management near resistance levels.

Looking ahead, traders should watch token unlocks like Optimism's $16.82 million OP release on June 30 and Sui's $117.91 million SUI unlock on July 1, which may introduce selling pressure. Macro events, including Fed Governor Lisa Cook's speech and Mexico's rate decision, will shape dollar index movements—currently down 0.56% at 97.14—and impact crypto correlations. With Bitcoin dominance at 65.65% and the ETH/BTC ratio rising 1.95%, diversifying into altcoins with strong fundamentals, such as SEI's 50% weekly surge driven by Wyoming's institutional endorsement, presents strategic opportunities. Overall, Bitcoin's consolidation above $106,414.03 support sets the stage for renewed upside if bullish catalysts materialize.