Bitcoin Price Soars, Fuelled By Potential Spot ETF Approval: A Deep Dive into the Cryptocurrency Surge
Summary:
Bitcoin's value surged to reach a high of $37,972, fueled by anticipation surrounding the possible approval of a Bitcoin spot exchange-traded fund (ETF). This increase was despite prevailing macroeconomic hurdles and led to a bull run in the cryptocurrency market. The Securities and Exchange Commission (SEC) has opened an approval window for 12 outstanding ETFs, with a decision potentially leading to a significant uptick in demand and a hefty increase in Bitcoin's market cap. The ongoing bull trend, Bitcoin's successful breach of the $37,000 resistance, and heightened activity in futures and options sector, all solidify market optimism about Bitcoin's price trajectory.
The value of Bitcoin (BTC) witnessed an upsurge today, soaring to a day's best of $37,972 before reverting under $37,000. A surge in anticipation around a possible BTC spot exchange-traded fund (ETF), triggering a wave of short liquidations, is largely to credit for the inflation in prices across the cryptocurrency market. Bitcoin value, Source: TradingView. Here's our examination of why the Bitcoin value experienced this rise today.
As institutional interest in Bitcoin strengthens, so does market sentiment. Present macroeconomic obstacles notwithstanding, Bitcoin's price is on the rise, notching a 121% year-to-date increase. Furthermore, market data suggests options traders leaning towards the $40,000 mark. The price volatility witnessed in the last fortnight contributes to the Crypto Fear and Greed index reaching its maximum level since November 2021 when Bitcoin achieved an all-time high of $69,789. Source: Newhedge's Fear and Greed Index.
The possibility of approval for the 12 remaining ETFs by the Securities and Exchange Commission (SEC) has been opened from Nov. 9 following a spate of BTC spot ETF amendments mid-October. According to a recent research note, there's a 90% probability of approval by Jan 10. But an early decision could potentially pave the way for approval orders for other contenders.
Despite numerous submissions, including from BlackRock, Fidelity, ARK Invest, and 21Shares, the SEC hasn't given the nod to a BTC spot ETF. The window of approval continues till Nov. 17 but may be extended to Jan. 10 if the SEC persists in the delay.
Opinions suggest an approval might bring in $600 billion in fresh demand. CryptoQuant analysts predict a $1 trillion surge in Bitcoin's market cap following an ETF approval. Galaxy Digital forecasts the price conclusion to rise by 74% in the first year post a BTC spot ETF inauguration.
With Bitcoin gains coinciding with a drop in BTC supply on exchanges below the May 3, 2023 peak, over 200,000 Bitcoin have been removed from exchanges since hitting the annual summit. The marked withdrawal of coins from cryptocurrency exchanges is considered a bullish indicator, as traders usually withdraw BTC for self-custody long-term holding. 92% of all newly minted BTC were purchased by long-term Bitcoin holders on Nov. 7.
As Bitcoin continues its exodus from exchanges, liquidations significantly impact the price. In the past day alone, there's been a liquidation of over $126 million worth of BTC shorts, of which $74.6 million occurred within a 12-hour duration. Bitcoin liquidation data, Source: Coinglass.
Bitcoin's bullish momentum is palpable, providing the impetus for BTC to break free from consolidated price brackets. Clearing the pivotal $37,000 resistance levels instills confidence in Bitcoin's upward price resilience. This shift is leading market observers to posit an upswing in Bitcoin's price outlook. It is also noteworthy the rise in demand, reflected in increased skew with BTC, as implied vols heighten across the curve and futures and options flows being increasingly promising.
This news piece does not double as investment guidance or recommendations. As all investment and trading maneuvers carry an element of risk, readers should undertake their own due diligence before making a decision.
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Published At
11/9/2023 6:00:16 PM
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