Bitcoin Soars 4.75% amid U.S. Shutdown Aversion, Fuels Hope for ETF Launch
Summary:
Bitcoin's value surged by about 4.75% in the past 24 hours, marking its most significant daily leap since Aug. 29. This surge followed the U.S. Congress's decision to push back a potential government shutdown to mid-November. The decision also brings hopes that the SEC can meet expected Bitcoin ETF deadlines in the coming months. Furthermore, extensive short liquidations in the derivatives market are likely to have contributed to the rally. While there are signs of an imminent correction, Bitcoin's chances of reaching $30,000 are also improving.
In the last 24 hours, the value of Bitcoin (BTC) has surged by about 4.75%, reaching roughly $28,250. This considerable jump, the largest since August 29, came on the back of the U.S. Congress averting an impending government shutdown, which was pushed to mid-November. This decision saw the value of Bitcoin increasing significantly, forming its largest upswing since the end of August.
As a result of the avoided shut-down, it's anticipated that the U.S. Securities and Exchange Commission (SEC) might meet its intended deadlines for Bitcoin ETF in the coming months. In the previous week, the SEC pushed back its decision on several Bitcoin ETF applications, inclusive of BlackRock's. If the Bitcoin ETF launches, the Bitcoin market could potentially pool in an estimated $600 billion in capital.
The recent surge in Bitcoin's value coincides with the start of Bitcoin's historically bullish months, reinforcing the 'Uptober' narrative. Generally, Bitcoin price jumps by an average of 20.82% in October, dating back to 2012. The only two exceptions were seen in 2014 and 2018.
As Bitcoin's value continues to increase, there have been substantial short liquidations in the derivatives market. Almost $43 million worth of shorts were liquidated in the previous 24 hours. Comparatively, only around $6 million in long positions were liquidated. A similar event happened between September 12 and 13, leading to a 5.5% rally by September 19.
Short sellers, by purchasing the underlying asset, liquidate their positions. Thus, the influx of new buyers coupled with the short liquidations probably elevated the BTC/USD pair even more.
From a technical viewpoint, the ongoing rally of BTC could face a short-term lull. The daily relative strength index (RSI) of BTC might touch or surpass 70 this week, indicating an 'overbought' area. This typically suggests an imminent period of correction or stabilization. Also, Bitcoin's resistance is being tested near the 0.5 Fib line at approximately $28,330. This same level acted as support back in July and August, which could trigger a pullback move to the 0.382 Fib line, around $27,550, in October.
On the flip side, if BTC manages to break above the 0.5 Fib line, the likelihood of it hitting $30,000 increases. A similar scenario is seen from a weekly timeframe perspective, as it also hinges on continued support above the 200-week exponential moving average (200-week EMA; the blue wave) near $25,750.
The bears will, nonetheless, aim to drive the price under the 200-week EMA. If that happens, the bulls' next defensive line will be the multi-year ascending trendline support, approximately at $23,500.
This article should not serve as investment advice or recommendations. As there is always a risk involved with any investment and trading action, readers should make decisions based on their research. Secure this article as an NFT to commemorate this historical event and express your support for independent journalism in the crypto world.
Published At
10/2/2023 10:29:37 AM
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