Bitcoin Surges Past $31,000 Amid Anticipation of Spot Bitcoin ETF Launch
Summary:
The price of Bitcoin soared above $31,000 on Oct. 23, reflecting keen investor anticipation over potential advancements such as the imminent launch of a Bitcoin ETF. Response to this trend has been mixed; while some analysts express caution, institutional investors have shown a steady increase in weekly crypto asset inflows. Notably, Bitcoin's 20-day moving average has edged above the 200-day moving average, which is seen as a positive signal. However, most traders are eyeing the 'golden cross', where the 50-day average crosses above the 200-day average.
On October 23, the price of Bitcoin (BTC) exceeded $31,000, a level last reached four months ago when Bitcoin was trading at $31,800. The increased value follows eager anticipation from analysts and investors of potential advancements that point towards the introduction of a Bitcoin ETF. According to an amendment to the latest iShares (Blackrock) S-1 document, Scott Johnsson highlighted that Blackrock has procured a CUSIP readying for a launch, and might be seeding with cash this month.
Bloomberg Senior ETF analyst Eric Balchunas responded to Johnsson's post and urged his followers to temper their enthusiasm. He noted that the adjusted S-1 document from iShares (Blackrock) suggests that BlackRock is set to seed its ETF, a necessary step towards launching it. He further clarified the process, explaining that seeding an ETF means an initial investment is put in, usually by a bank or dealer, to buy some creation units, in this case Bitcoin, in return for ETF shares which can be traded on the open market from the first day.
Market analysis indicates that Bitcoin's recent surge above the $30,000 zone is primarily resulted from spot volume. Additionally, CoinMetrics data shows a rise in weekly cryptocurrency investments by institutional investors into digital asset investment products. According to CoinShares Analyst David Butterfill, "There have been inflows to digital asset investment products for four consecutive weeks totaling $66m, bringing the last four weeks' total of inflows to $179m. After recent price increases, total assets under management (AuM) have grown by 15% since their early September lows, reaching almost $33bn, the highest since mid-August."
Furthermore, the trading volumes for CME futures have also doubled, indicating renewed bullish sentiment regarding Bitcoin's recent price trend among futures and spot traders. The increased volumes of CME and spot, instead of a Binance futures open interest surge, suggest this week's trend may represent more than standard retail traders trying to open long or short margins on the latest price change.
Technically, Bitcoin's 20-day moving average has edged slightly above its 200-day moving average, a favorable signal. However, some traders are likely waiting for the widely anticipated golden cross, in which the 50-day moving average crosses above the 200-day average.
Reviewing Bitcoin’s longer timeframe market structure, any successive daily closures above $31,700 would be significant. Higher daily or weekly candles above this level would lift the price above a crucial pivot point and into territory not seen since May 2022.
The author provides no investment advice or recommendations. Every investment and trading move carries risk. Readers are advised to conduct their own due diligence before making a decision.
Published At
10/23/2023 9:34:47 PM
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