Bitcoin Battles to Retain $34K Level Amid Record Institutional Interest and ETF Anticipation
Summary:
Struggling to maintain the $34,000 mark, Bitcoin's price had a noted rally that saw it surpass the $35,000 level on October 23. This breach of the seven-month-long $32,000 resistance has sparked predictions of upward progression for the cryptocurrency, with instigators like potential SEC approval of a spot Bitcoin ETF contributing to the rally. Growing interest from institutional investors is evidenced by the BTC open interest reaching a new high above 100,000 BTC on CME.
The current price of Bitcoin (BTC) is struggling to maintain the $34,000 mark after a stunning rally and brief short squeeze propelled the cryptocurrency to upwards of $35,000 on October 23. In a financial update on October 24, Charles Edwards, founder of Capriole Investments, highlighted that Bitcoin has broken through the seven-month-long $32,000 resistance barrier, which he likened to slicing through butter. He forecasts that the impending monthly resistance should not present any significant obstructions. Edwards posits, “A quick escalation to the mid-range ($43K) or a brief hold-up within the $32-$35K support resistance, preceding further progression, would be logical.” Echoing a previous Cointelegraph update, higher high candle closings, daily or weekly, above the $31,700 threshold would denote a key shift, pushing the price into territory not traversed since May 2022. When discussing this week’s price catalysts, Edwards acknowledges that anticipation of an imminent SEC approval of a spot Bitcoin ETF had a role in the rally. Additionally, he points out several other immediate factors. Bitcoin price instigators. Source: Capriole Investments. LayerTwo Labs founder Paul Sztorc agrees, stating, “We are witnessing significant signs of Bitcoin uncoupling from equities, an unexpected divergence for many market participants." Amidst overseas conflict and increasing macroeconomic precariousness, traders were focused on an impending downturn, which did not come to fruition. Sztorc views a parallel between the current situation and the U.S. regional banking crisis when Bitcoin similarly outperformed. Sztorc suggests that much of the recent price fluctuations stem from traders and investors accumulating in anticipation of this event. He adds, “Many anticipate that the Federal Reserve will have to relax its monetary policy imminently due the swift rise in yields. Specifically, traders predict a yield-curve control reversal by the Fed, which could potentially lead to monetary depreciation." The CME recorded evidence of growing interest from institutional investors towards Bitcoin and a potential spot BTC ETF, as BTC open interest registered a new high over 100,000 BTC. The implication here is that institutional investors are likely accumulating spot Bitcoin and need to safeguard this position, thus contributing to the uptick in volumes and open interest seen on CME and elsewhere. CME BTC futures OI has for the first time exceeded 100k BTC. CME's OI increased by 4,380 BTC on the day that offshore perp OI dropped by 26,735 BTC, tweet from Vetle Lunde on 24 October 2023.
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Published At
10/24/2023 6:39:42 PM
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