Bitcoin (BTC) Rising Again, Touched $35000 Mark, But How?
Bitcoin rockets back to $35,000 for the first time in over a year as prospects of an SEC-approved ETF reignite crypto market enthusiasm.
Bitcoin (BTC) has rallied back to the $35,000 mark for the first time since May 2022. The world’s largest cryptocurrency jumped over 10% on October 24, 2023, to hit its highest price in 16 months.
The dramatic price increase appears to be driven by growing optimism that the first Bitcoin spot exchange-traded fund (ETF) is nearing regulatory approval. An ETF provides mainstream investors with Bitcoin exposure without owning it.
What Possibly Accelerated Bitcoins Rise?
Several companies, including BlackRock, have applied to launch a spot Bitcoin ETF with the Securities and Exchange Commission (SEC). Speculation has mounted that the SEC could approve one of these applications as soon as January 2024.
BlackRock’s application for a Bitcoin ETF showed up on the Depository Trust & Clearing Corp. (DTCC) website with a unique identification number. While this does not guarantee approval, it signals BlackRock is confident in getting regulatory clearance.
Shares of crypto companies like Coinbase and MicroStrategy rallied 10-15% alongside the Bitcoin price surge as investors anticipated an ETF could substantially expand the crypto investor base.
Image 1: Source: CoinMarketCap
According to data aggregator Coinglass, over $231 million of leveraged Bitcoin positions were liquidated in the past day, predominantly short positions. Forced liquidations of shorts likely accelerated Bitcoin’s climb upwards.
The prospect of an SEC-approved, mainstream Bitcoin ETF has reignited enthusiasm across the crypto industry. Prominent voices are celebrating Bitcoin’s resurgence after a brutal 2022 bear market.
Key factors behind Bitcoin’s 2022 decline:
- Macroeconomic headwinds like rising interest rates prompted investors to flee risky assets.
- Several major crypto firms failed, most notably FTX, in November 2022, damaging trust in the industry.
- Bitcoin fell from an all-time high of around $69,000 in November 2021 to near $15,000 in 2022 as crypto winter set in.
- Other contributing factors included the Terra-Luna collapse, the Three Arrows Capital blowup, and the Celsius network bankruptcy.
Bitcoin’s jump to $35,000 is its largest single-day gain since September 2022. The seminal cryptocurrency now sits at prices last seen before a series of devastating setbacks for the crypto sector.
If the SEC approves a spot Bitcoin ETF in early 2024, as many anticipate, it could significantly expand Bitcoin’s accessibility to mainstream investors. With the crypto industry gradually recovering from a crisis of confidence, Bitcoin appears poised to retest its all-time highs.
Major drivers behind this week’s rally:
- Anticipation of SEC approving a Bitcoin spot ETF.
- Bullishness from major financial players like BlackRock.
- BlackRock CEO Larry Fink called Bitcoin a potential “flight-to-quality” asset like gold.
- Short squeezes add momentum as leveraged shorts are liquidated.
- Renewed optimism as crypto rebounds from a miserable 2022.
While risks remain, Bitcoin crossing $35,000 shows it retains substantial potential upside after languishing below $20,000 for much of last year.
Other key points:
- Bitcoin peaked near $69,000 in November 2021 before crashing below $20,000 in 2022.
- Approval of a spot Bitcoin ETF could dramatically increase adoption by mainstream investors.
- Crypto industry experts say Bitcoin’s resilience proves obituaries were premature.
- Bitcoin is by far the largest cryptocurrency, with a total market value of over $650 billion.
Will the Rise of BTC Continue?
Bitcoin’s volatile price action shows the crypto king remains subject to intense speculative swings. After surging past $35,000, BTC quickly pulled back below $33,000 before rebounding back above $34,000. This demonstrates there is still substantial uncertainty among investors about how sustainable this rally is.
Image 2: Source – CoinMarketCap
Image 3: The recent graph of BTC shows a dip. Source – CoinMarketCap
However, the core narrative around a potential SEC-approved Bitcoin ETF is gaining traction. Mainstream financial powerhouses like BlackRock expanding into crypto has lent credibility to the digital asset class. While the ETF is still pending approval, the prospect is firing up animal spirits among investors – both crypto diehards and new entrants.
However, regulatory risk persists as a major variable. If the SEC rejects or delays a spot Bitcoin ETF, it could deflate momentum. And lingering fallout from FTX’s implosion continues to weigh on market psychology.
For now, Bitcoin’s technical picture looks strong as it broke firmly above its 50-day moving average near $22,000. With its uptrend intact, BTC appears poised to retest overhead resistance around $40,000. Ultimately, Bitcoin’s future likely hinges on whether mainstream finance fully embraces it. If so, new highs seem feasible. If not, existential risks remain.
The king crypto is back with a vengeance, serving notice to doubters. Bitcoin’s surge to $35,000 demonstrates it remains the alpha cryptocurrency with unrivalled name recognition and network effects. Further explosive upside could await in 2024 if an SEC-approved ETF opens the floodgates to institutional and retail investment.
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