Bitcoin has surged above $71,000 this week, breaking free from the narrow trading range it had been confined to for several weeks. A key driver behind this price movement is the robust demand seen through ETFs, with approximately $1.2 billion in net inflows recorded over the past week.

Looking ahead, several important factors suggest that a fresh wave of demand may be forming for Bitcoin.

A New Wave of Bitcoin Demand

According to the latest analysis by CryptoQuant, spot Bitcoin ETFs have witnessed around $1.2 billion in net new inflows over the past week alone, indicating heightened interest among buyers in accessing the asset through these investment vehicles. This substantial influx of capital into Bitcoin ETFs has provided a significant lift to the cryptocurrency's price following a period of relative stagnation.

The recent uptick in BTC's price has put short-term investors who recently entered the market in a profitable position once again. This renewed profitability reduces the likelihood of a shift in investor sentiment from bullish to bearish, mitigating the risk of a downturn.

CryptoQuant still sees a period of consolidation within the $60,000 to $70,000 range as more likely in the near term. Currently, there are no significant positive economic catalysts that could trigger a substantial influx of new capital and propel Bitcoin into major price rallies as seen in previous bull cycles.

This week's economic calendar is relatively light on major data releases, which bodes well given the prevailing optimistic sentiment following the latest US inflation figures. However, disappointing economic reports could potentially dampen risk appetite and lead to a pullback in Bitcoin's price towards the $60,000 level.

While concerns persist about Bitcoin returning to consolidation, the report also points out emerging indications that the next major rally could commence sooner than anticipated.

The market is already experiencing a resurgence fueled by speculation surrounding the approval of a spot Ether ETF, which has propelled the collective market cap above $2.55 trillion.

"Outlook: Despite the base scenario of consolidation, signs of a new wave of demand are emerging. There is a growing possibility that the next rally could begin sooner than expected."

Critical Zone for Bitcoin

Renowned cryptocurrency analyst Ali Martinez indicates minimal resistance within the $70,180 to $70,600 price range. Around 450,000 Bitcoin addresses purchased approximately 273,000 BTC within this range, establishing a supply zone.

If Bitcoin successfully breaks through the $70,180 to $70,600 range, the path of least resistance points upwards. However, if selling pressure halts the rally within this range, it could temporarily cap the upside potential.