Bitcoin Holds Firm as Crypto Market Awaits Key U.S. Economic Data

Bitcoin continues to show resilience ahead of the Memorial Day holiday, maintaining support above the $77,000 level after a sharp V-shaped recovery from $75,000. Despite rising fear among retail traders and more than $1.26 billion in weekly Bitcoin ETF outflows, the broader crypto market is witnessing a strong capital rotation into BTC as investors move away from weakening altcoins.

The latest Bitcoin price action highlights growing confidence among institutional investors and long-term holders. While spot Bitcoin ETFs have contributed to short-term selling pressure, on-chain data suggests that large investors are aggressively accumulating BTC during the current consolidation phase. Market analysts believe the rebound was partly fueled by improving diplomatic developments in the Middle East, which helped reduce overall market anxiety.

Bitcoin dominance is also accelerating as traders abandon underperforming altcoins in favor of safer crypto assets. This shift is being reinforced by institutional portfolio adjustments. Bank of America, the second-largest bank in the United States, reportedly increased its exposure to BlackRock’s IBIT Bitcoin ETF to $37 million while cutting positions tied to Ethereum and Solana. The move signals growing institutional confidence in Bitcoin compared to other digital assets.

Another bullish catalyst comes from Washington. The newly introduced American Reserve Modernization Act (ARMA) proposes the creation of a strategic Bitcoin reserve under the U.S. Treasury. If approved, government agencies would be required to transfer all seized Bitcoin into centralized custody for at least 20 years, with BTC sales permitted only for debt repayment purposes. The proposal is viewed by many crypto investors as a long-term positive signal for Bitcoin adoption.

Markets are now closely watching the upcoming April Core PCE inflation report scheduled for May 28. Lower oil prices have increased expectations that the Federal Reserve could adopt softer monetary policy language in the coming weeks. However, trading activity may temporarily slow due to the Memorial Day holiday, as U.S. stock exchanges and crypto ETF markets remain closed.