Upside momentum is improving, which could keep crypto buyers active into the weekend. Some analysts expect a short-squeeze to push bitcoin (BTC, +3.95%) above the 50-day moving average around $34,000 given oversold conditions on the charts. 

“For the first time in many weeks we are seeing bullish signs here and expect Bitcoin to head towards the upper end of the $30,000-$40,000 range,” wrote Pankaj Balani, CEO of Delta Exchange, in an email to CoinDesk.

Cryptocurrencies:

Traditional markets:

“On the options front we have seen a good amount of covering between the $35,000-$40000 strikes for the weekly maturity,” Balani wrote. “For the July expiry there is still decent open interest in the $35,000 strike, which should act as a ceiling for BTC for this month.”

Overall, risk sentiment is improving in traditional and crypto markets as concerns about tighter monetary stimulus wane. On Thursday, the European Central Bank (ECB) pledged to keep interest rates lower for longer and adjusted its policy stance to allow for a slight overshoot of the 2% inflation target. 

The ECB announcement along with a broad decline in global government bond yields contributed to higher stock prices over the past week. Aside from the reach for yield, improving sentiment and positive comments from Tesla CEO Elon Musk on Wednesday kept crypto bulls active.

Bitcoin options traders are pricing an 8% chance of the cryptocurrency rising to a new peak above $64,800 by Dec. 31, according to data source Skew. 

Additionally, six-month implied volatility, or investors’ expectations for price turbulence, has dropped to a more than two-month low of 80% at press time, having peaked at 122% on May 17.

That implies investors expect the price consolidation to continue for a while, wrote CoinDesk’s Omkar Godbole. 

“If BTC retains the lower range of 30K, shorts will begin to squeeze as BTC moves to the middle point of the range, likely accelerating in the coming days/weeks,” wrote Sashimi Nakamoto on CryptoQuant. 

The chart below shows the bitcoin leverage ratio, which is open interest divided by exchange reserves, reaching the highest level since April. The bitcoin funding rate is slightly negative, which indicates higher short interest than long interest, according to Nakamoto. 

The funding rate measures the cost to fund long positions in the market for bitcoin perpetual swaps, a type of derivative in the cryptocurrency markets similar to futures contracts in traditional markets.

Since June, total assets under management across exchange-traded and over-the-counter-traded digital asset investment products decreased by 14% to $34.8 billion. 

Compared with traditional asset classes, digital asset markets still have a “long way to go before more risk-averse investors are fully at ease,” according to a report by CryptoCompare.

As NFTs gain popularity despite an overall bearish sentiment in the crypto market, some NFT critics inside the market took to Twitter blaming the non-crypto natives who cash out their ether immediately after NFT sales for the lackluster price movement of the second-largest cryptocurrency by market capitalization.

But according to multiple analysts and market participants, the impact of NFT sales, if any at all, remains a nonfactor on ether’s prices. Instead, the complaint showcases many traders and investors’ frustrations in a dull market.

The speculation “is more like a reflection of the current market sentiment,” Daniel Lv, co-founder of China-based blockchain Nervos Network, told CoinDesk’s Muyao Shen through a representative.

The blame, though, isn’t completely irrational since growth in the NFT market has not quite slowed down partly because of the large number of endorsements it has received from non-crypto celebrities.

Most digital assets on CoinDesk 20 ended up lower on Friday. 

Notable winners as of 21:00 UTC (4:00 p.m. ET):

tezos (XTZ (+7.42%)) +3.24%

Notable losers: 

the graph (GRT (-0.6%)) -4.82%

polkadot (DOT (+1.79%)) -4.1%

nucypher (NU (+1.39%)) -3.76%