After the Bitcoin price reached a three-month low of $24,835 last week, the bulls currently appear to be gaining the upper hand again. BTC price has continued its upward trend over the past 24 hours and is up 1.6% to currently reach $26,795. At one point, BTC had already reached $27,203 before any corrective move occurred.
Why is Bitcoin up today?
As always, one can only speculate on the reasons why Bitcoin’s price is rising. But thanks to the application of BlackRock, the world’s largest asset manager, for a Bitcoin Spot ETF in the US, optimistic sentiment has returned to the market. A Bitcoin Spot ETF is predicted to open the floodgates for institutional investors.
As NewsBTC reported, the history of the first gold ETF in the US in 2004 could be an indicator of the bullish impact that the adoption of a spot ETF could have. The gold ETF has played an important role in the adoption of gold by institutions. Within eight years of the first ETF, the price of gold had more than quadrupled.
In principle, the US Securities and Exchange Commission has 240 days (approximately eight months) to decide on the application. However, Bitcoin Magazine CEO David Attley, claimed yesterday that he had heard a convincing argument that the BlackRock Bitcoin ETF could be approved soon (“days to weeks”).
This news may have had as positive an impact on the market as yesterday’s news that Fidelity may also soon be filing for a Bitcoin Spot ETF along the lines of BlackRock. It is clear that crypto Twitter has become much more optimistic as a result of the BlackRock news.
And major investors in BTC, the so-called whales, have also been optimistic about the leading cryptocurrency for some time. If reported by on-chain data analytics service Santiment, whales have been busy over the past two months as the public watched the price fall.
“Now that we are back above $27,000, it is far from coincidental that wallets holding 1,000 to 10,000 $BTC have accumulated $3.5 billion since the first week of April,” says Santiment.
Intraday trader @52Skew makes a similar observation regarding BTC-perp CVD buckets & delta orders: “Whales are usually still floating the price, gasping for this bounce, shorts still twapping on every bounce.”
In addition, the trader noted over the past few hours that there was a lot of demand in the spot market on Binance, the largest crypto exchange. According to him, spot buying is a sign of an ongoing rally, so ideally spot buying should continue.
As for Binance’s open interest and funding, Skew argues that many shorts are chasing the price after the longs were previously squeezed.
Outlook for H2 2023
Another positive effect on the market could be the outlook on the technical chart for the second half of the year. As Aksel Kibar, Chartered Market Technician (CMT), writes via Twitter, BTC could be about to break out of the correction that has been happening since mid-April:
It appears we have a valid downward sloping channel on $BTCUSD with the upper limit acting as short-term resistance at 27K. Breach from the channel can complete the existing retreat to the larger H&S bottom reversal.
At the time of writing, Bitcoin price saw a slight correction move and was trading at $26,795.
Featured image from iStock, chart from TradingView.com