Bitcoin experienced a notable 5.9% increase in value from June 2 to 5, reaching $71,746 before facing resistance. This surge was supported by nearly $1 billion flowing into U.S.-listed Bitcoin spot exchange-traded funds, signaling a robust demand from institutional investors.

The positive momentum of Bitcoin was also buoyed by the escalating unrealized losses in the U.S. banking sector. Despite conducive factors such as a more favorable stance towards cryptocurrencies from U.S. lawmakers, Bitcoin struggled to surpass the $72,000 mark.

Persistent Regulatory Uncertainty Amid Optimistic Trends

Matt Hougan, the chief investment officer at Bitwise, highlighted how regulatory ambiguity hindered financial advisers from expanding their exposure to cryptocurrencies. However, Hougan remains optimistic, suggesting a gradual shift towards regulatory clarity, which initiated with the Democrats' decision to revoke the U.S. Securities and Exchange Commission's Staff Accounting Bulletin 121.

The approval of spot Ethereum ETFs by the SEC indicated a softened stance towards anti-crypto debates after legal setbacks, including Grayscale's GBTC Trust conversion. Although positive steps have been taken, President Joe Biden's veto of the SAB 121 repeal underscored the lengthy regulatory journey ahead for the crypto industry.

A Federal Deposit Insurance Corporation report revealed that U.S. financial institutions are grappling with $517 billion in accounting losses due to elevated rates impacting residential mortgage-backed securities. The report also warned of 64 banks edging towards insolvency in the first quarter of 2024.

Potential Price Volatility Forecast and Macroscopic Factors

Arthur Hayes, the co-founder of BitMEX, suggested that increasing the money supply could benefit scarce assets like Bitcoin. He inferred that Bitcoin's substantial bull run in March 2023 followed the collapses of Silicon Valley Bank and Silvergate Bank, hinting at a similar pattern in the future.

Hayes cautioned that prior to a possible Bitcoin rally, a decline may precede negative macroeconomic events in the stock and bond markets. The historical decline of Bitcoin's price to $19,559 before the March 2023 rally reflected uncertain market conditions, mirrored by a noteworthy drop in the U.S. 2-year Treasury yield.

Investors anticipate a correction in Bitcoin's price ahead of a potential rally, considering the recurring inflows into U.S. spot Bitcoin ETFs, which accumulated over $52 billion since their introduction in January.

Impact of Stock Market Performance on Bitcoin

The solid performance of U.S.-listed tech stocks, including NVidia (NVDA), propelled the S&P 500 index to an all-time high on June 5. Analysts foresee two rate cuts by the Fed this year, fostering a favorable environment for stocks.

In a contrasting effect, a flourishing stock market diminishes the appeal for alternative assets like Bitcoin. GameStop's recent surge, influenced by social media trends and ‘Roaring Kitty’ gains, could divert traders' attention from cryptocurrencies.

Despite the potential for Bitcoin to reach new peaks, the comfort of investors with traditional assets poses a challenge to a significant breakthrough above $71,000 in the short term.

Disclaimer: This article is for general informational purposes and should not be construed as legal or investment advice. The views expressed are solely those of the author and do not necessarily represent Cointelegraph's stance.