The Bitcoin price has risen significantly by more than 4% in the last 24 hours. The price has increased to $36,800. Several key factors contributed to this rally.
#1 Discover Bitcoin ETF buzz
The rise in BTC’s price can be attributed to renewed speculation about the possible approval of a spot Bitcoin exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC). Yesterday, Bloomberg’s James Seyffart released a new note highlighting that the SEC is in a unique position within eight days where they could approve all twelve spot ETF applications, as Bitcoinist said. reported.
Seyffart further pointed out that the SEC has the ability to approve 9 applications at any time until January 10, 2024 (excluding Global Seyffart and Eric Balchunas of Bloomberg still estimate a 90% chance. approval for at least some of the pending applications before January 10, 2024.
The ETF buzz was further fueled by news that Grayscale is in active discussions with the SEC about converting its GBTC trust into a spot ETF. Grayscale’s recent win over the SEC on August 29 has increased anticipation.
#2 Bitcoin whales
There has been a notable increase in Bitcoin whale activity, which can be interpreted as a sign of market optimism. Crypto analyst MartyParty pointed out a pattern of substantial buying, with a whale reportedly buying $15 million worth of BTC every three hours, indicating that positive developments on the ETF front are being anticipated.
Keith Alan from Firecharts noticed that Bitcoin whales are actively shifting market liquidity, with noticeable changes in bid levels. He stated: “FireCarts shows that BTC whales continue to move liquidity through the order book. Bids that were previously lowered to $34,000 have now returned to the $34.5,000 level.”
Additionally, an increase in TWAP (Time-Weighted Average Price) purchases on Coinbase has been reported. Crypto analyst Exitpump noted, “BTC Spot Delta: Someone Twapping / Market Buying on Coinbase.” TWAP buying is a trading strategy used by major players to execute large orders in a way that aims to minimize price impact and achieve an average execution price close to the market average over a period of time.
#3 Short squeeze
The Bitcoin market has also experienced a significant short squeeze, with approximately $51 million in BTC short positions being liquidated today (according to Coinglass facts, as of the time of writing). This amount marks the largest short squeeze since October 23 and 24, when $161 million and $68.5 million of Bitcoin short positions were liquidated on consecutive days, leading to a substantial price increase of more than 18%. Today’s short squeeze certainly misled some traders who believed that $36,000 – the previous range high – was a “safe” short trade.
#4 Bitcoin supply dynamics
Bitcoin supply on exchanges has steadily declined, hitting a six-year low at the end of October. Daan Crypto Trades, a well-known crypto trader, highlighted the downward trend in Bitcoin inflows to exchanges. He noted:
Bitcoin Exchange inflows have declined in the higher time frame. Compared to 2021-2022, there is a clear downward trend in BTC inflows to exchanges. I would expect this to pick up again once the bull market really gets going and people start taking profits.
Moreover, on-chain facts reveals that a significant 76% of Bitcoin supply is currently held by long-term holders, who have not moved their coins in over 155 days. Analyst Dylan LeClair highlighted the power of hodlers, noting that as much as 88.5% of supply has remained static over the past three months.
“The hilarious thing is that 88.5% of Bitcoin supply has not changed in the last three months. Wall Street is really going to have to pump this thing to get hodlers to part with their coins,” LeClair said declared.
At the time of writing, BTC was trading at $36,585.
Featured image from Shutterstock, chart from TradingView.com