The Bitcoin price has rocketed beyond $41,500 (₹34,60,000) in a spectacular spike, spurred by a convergence of factors ranging from the market expectation of a Bitcoin spot ETF to larger macroeconomic trends.
Not only that, but increased interest from institutional and ordinary investors has driven the price of Bitcoin and other top cryptocurrencies to skyrocket. Here’s a full breakdown of the main reasons for this rally:
Bitcoin Price Surges After SEC Opens Spot Bitcoin ETF Window
Over the past few months, there has been widespread anticipation within the digital asset industry regarding the potential launch of a Spot Bitcoin ETF.
If approved, this would mark the first such ETF in the United States and could significantly boost the digital asset’s value. Recently, a clearer timeline has been established for the decision-making process.
According to Bloomberg’s James Seyffart, the SEC is expected to announce its decision on the Spot Bitcoin ETF between January 5th and 10th. Additionally, the agency will probably grant decisions for over 12 applications within this timeframe. Seyffart also mentioned that any approvals are likely to take effect starting January 8th.
Up until now, the SEC has continuously postponed its verdict on the Bitcoin product. Nonetheless, there’s an anticipation for a shift in this stance during the early months of 2024. Many foresee a potential resolution on multiple fronts as early as January, aligning with the projected approval timeframe.
Growing Interest of Institutions in Bitcoin
The return of institutional interest in Bitcoin is consistent with the larger trend of institutional adoption, in which institutions frequently pave the way for retail investors. Weekly inflows have reached yearly highs over the last five weeks, corresponding with a 24% increase in spot market capitalization.
As seen by Microstrategy’s recent move, the company recently added more Bitcoins to its BTC bank, purchasing approximately 16,000 additional bitcoins. This positive connection illustrates institutional investors’ influence on overall crypto market sentiment and momentum.
Aside from that, the liquidation of $85.17 million in Bitcoin short positions, according to Coinglass data, has pushed Bitcoin’s price higher. A crucial aspect has been the short squeeze, which has been exacerbated by strong spot demand.
Bitcoin Price Future Outlook
On Monday, Bitcoin and other cryptocurrencies surged, with the largest digital asset reaching a 20-month high. Bitcoin’s price has risen 6% in the last 24 hours to near $42,100 (₹34,94,000), breaking through critical levels of $40,000, $41,000, and $42,000 in a weekend rally that has sent the token to its highest level since April 2022.
Since mid-October, Bitcoin has gained more than 50%, breaking out of an extended tiredness. The last time prices were this high was immediately before the Terra stablecoin network failure, which triggered a devastating bear market.
Talking about the current major supports and resistance, the token is currently facing heavy resistance at the price level of $42,500 and $43,000. In addition, the token faces strong support at the price level of $41,000 and $40,000. However, looking at the current market scenario and the growing institutional interest, it can be anticipated that Bitcoin price might continue its bull run for a prolonged time.
The rebound of the Bitcoin price reflects increased investor trust in digital assets, particularly in light of macroeconomic and financial sector events. The prospect of a spot bitcoin ETF, as well as reactions to global monetary policy changes, highlight bitcoin’s growing importance in the global financial system.
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