Bitcoin price has risen to $38,012 (on Binance) and is marking a marginally higher high. Here are the main reasons for the latest rise in BTC price.
#1 Euphoria over potential ETF approvals
The crypto market has been electrified by the possibility of the US Securities and Exchange Commission (SEC) approving several spot Bitcoin ETFs. With the approval window open from November 9 through Friday (November 17), experts like Bloomberg’s James Seyffart and Eric Balchunas estimate a 90% chance of approval for multiple submissions by January 10, 2024, Ark’s filing deadline Invest.
Remarkably, the SEC is facing a significant deadline, with three applications for spot ETFs from Franklin Templeton and Hashdex (due November 17) and GlobalX (due November 21) awaiting decisions. Amid this tense backdrop, Hashdex emerged as the first to face delays like the SEC postponed their decision on converting from a futures ETF to an ETF containing both futures and spot.
This news temporarily shocked the market, resulting in a sharp but short drop in the price of BTC, which plummeted from $37,400 to $36,780 in a quick five-minute period. However, the market’s resilience was quickly demonstrated when Bitcoin not only recovered, but surpassed its pre-announcement price within 25 minutes.
#2 Unprecedented institutional interest in Bitcoin
Institutional demand for Bitcoin has reached new heights, especially through exchange-traded products (ETPs). The recent BlackRock Bitcoin spot ETF filing has contributed significantly to this increase. “Assets under management through ETPs increased by 27,095 BTC, bringing the total to a record 204,170 BTC, equivalent to approximately $7.4 billion.” reports K33 research. This trend indicates a growing institutional embrace of Bitcoin as a viable investment asset.
#3 Supply and demand dynamics
Data from LookIntoBitcoin highlights a remarkable trend: more than 70% of Bitcoin has not moved in at least a year. “This is a historic moment that underlines the power of Bitcoin’s tokenomics,” the data provider said. They further explained: “As long as this HODL wave continues to rise, it signals a bullish market outlook, with long-term investors showing no signs of selling off their holdings. This is especially important given the upcoming Bitcoin Halving event and growing institutional interest.”
#4 Liquidity injections by the Fed
Arthur Hayes, co-founder of BitMEX, commented about the significant liquidity injected into the market and its impact on cryptocurrencies. ‘Keep your eye on the prize. Nearly $200 billion in liquidity has been added since the start of November, impacting assets like Bitcoin. This signals a potential continued rise in cryptocurrencies,” said Hayes. He emphasizes the importance of understanding RRP and TGA dynamics when predicting market movements.
#5 Inverse correlation with the DXY
The inverse correlation between Bitcoin and the US Dollar Index (DXY) has been a notable factor in Bitcoin’s recent price rise. When the DXY encountered resistance and started to fall, Bitcoin’s value rose inversely. Crypto analyst Josh declared“Bitcoin PUMPS while the DXY DUMPS!”
At the time of writing, BTC was trading at $37,467 after failing to break the ascending trend channel.
Featured image from iStock, chart from TradingView.com