Bitcoin Soars High at Start of 2024 Amid Anticipation of Bitcoin ETF Approval
Summary:
Bitcoin has started 2024 on a high note, reaching its highest value since April 2022. This rise is linked to anticipation around the U.S. SEC's decision on several Bitcoin ETF applications. Investors are betting on an increase in Bitcoin's futures prices, indicating the acceptance of Bitcoin ETFs. Additionally, Bitcoin's net flows have turned negative, hinting at growing buying pressure. The price gains are also related to the ascending triangle setup, an upward continuation pattern. The report ends by encouraging readers to conduct their own research about potential investment risks.
Bitcoin has had a roaring start to 2024, with its value escalating by about 9% to $45,925. This is the highest it's been since April 2022, owing to a cocktail of on-chain, elemental, and technical influences. Interestingly, CME Bitcoin futures are trading at a premium, attributed to the anticipation of the U.S. Securities and Exchange Commission (SEC)'s verdict on multiple spot Bitcoin ETF applications, which could occur before the official approval window commencing on Jan. 4. As of Jan. 2, these futures were valued at approximately $1,300 more than the cryptocurrency's immediate value. This suggests that futures traders foresee a surge in BTC's price due to expected increase in demand from a probable Bitcoin ETF approval.
Consequently, market participants expect the immediate price to match or surpass the futures price in the imminent days or weeks. Furthermore, Bitcoin's net flows - the variance between BTC entering and leaving all crypto exchanges - have showed a negative shift today. For spot exchanges, this decrease represents mounting buying pressure as traders seemingly withdraw their holdings from exchanges for long-term possession. This decline is consistent with an ongoing trend observed since June when BlackRock applied for a spot Bitcoin ETF, marked by decreasing balances across all crypto exchanges. This hints at expectations of price hikes leading up to the SEC's ETF decision and perhaps into the 2024 Bitcoin halving.
Compounding to Bitcoin's price escalation is its association with an upward continuation setup termed an ascending triangle. Under this arrangement, the prices surge after the price conclusively breaches the upper trendlines, elevating roughly to their maximum height. As of Jan. 2, Bitcoin's price has entered the breakout phase of its ascending triangle pattern, indicating that the price target is below $50,000.
This report does not serve as investment counsel or proposals. All investment and trading movements carry inherent risks – individuals should conduct their own in-depth study prior to decision making.
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Published At
1/2/2024 3:02:37 PM
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