- Bitcoin raised hopes in the market when it crossed the $40,000 mark.
- Trading activity reached new highs.
Optimism around Bitcoin [BTC] was at an all-time high when BTC crossed $40,000. The rise in the price of BTC has made institutional investors even more eager in their search for the BTC ETF.
It’s ETF season
According to Bloomberg analyst James Seyffart, BlackRock has once again filed an amended document for a Bitcoin spot ETF (ETFS-1) with the US SEC.
The SEC has reportedly issued similar instructions to multiple issuers, including Bitwise, which previously filed a second revised S-1 document.
This indicates a collaborative effort between the SEC and these issuers to address and resolve outstanding issues.
The greater accessibility could lead more people to invest in Bitcoin. It could also potentially have a positive impact on its demand and value.
UPDATE: They’re pouring in. We still have a spot #Bitcoin ETF S-1 (prospectus) change tonight. This one is from @Black rock. It is clear that SEC is giving multiple issuers the same or very similar instructions. pic.twitter.com/nk1yImZpXk
— James Seyffart (@JSeyff) December 4, 2023
In combination with this, open interest in BTC also increased.
Traders are going all-in
Open interest in perpetual bitcoin futures on Deribit has reached an annual peak of $740 million, a level last seen in November 2021 during Bitcoin’s all-time high above $68,000. Additionally, CME’s long open interest has reached an all-time high of $2.2 billion.
The rise in open interest in bitcoin futures on Deribit and CME could have a significant impact on Bitcoin.
When more people show interest in trading these futures, it indicates a growing demand for Bitcoin. This increased interest often leads to increased trading activity, potentially affecting the price of the cryptocurrency.
With Deribit open interest hitting a yearly high and CME’s bitcoin long open interest hitting an all-time high, this signals strong positive sentiment and confidence among investors.
Increased trading and higher demand could contribute to upward price movements for Bitcoin, as has historically occurred during open interest peaks.
BTC looks like a hedge
Another factor that could make people hopeful about BTC would be that it is losing its correlation with the S&P 500.
When Bitcoin and the S&P 500 move independently of each other, it means that Bitcoin’s value is not tied solely to traditional stock market trends. This independence is crucial because it indicates that Bitcoin is developing into a mature asset class.
Investors are often looking for assets that do not necessarily reflect traditional markets. The fact that Bitcoin is breaking away from the S&P 500 suggests that it is establishing its own identity as a store of value and protection against fiat.
#Bitcoin entered into a negative correlation with the S&P 500. It is no longer a technology stock. It is the digital gold.
h/t @jjcmoreno pic.twitter.com/AnxIdGCG4O
— Ki Jonge Ju (@ki_young_ju) December 4, 2023
Is $45,000 on the way?
Due to this surge in hope among holders, many expect that BTC could reach $45,000.
The $45,000 mark has enormous significance for Bitcoin’s medium-term investors. With Bitcoin recently rising from $35,000 to around $42,000, attention shifts to the next resistance level, which is $45,000.
This level is not only crucial from a technical perspective, but also for a substantial group of Bitcoin holders who acquired their holdings two to three years ago. This group of medium-term investors represents 16% of the active supply and has a significant influence on market dynamics.
Their decisions, especially as the price approaches or exceeds the $45,000 breakeven point, could create notable shifts in market sentiment.
Monitoring their activity on the exchanges provides valuable insights into potential market movements around this crucial price level, determining Bitcoin’s medium-term trajectory.
The $45,000 Threshold: A Turning Point for Bitcoin’s Medium-Term Investors
“The $45,000 figure is crucial because it represents the cost basis for investors who purchased Bitcoin 2 to 3 years ago. This cohort owns 16% of the supply and represents 33% of the realized limit.”
Quicktake post by Gustavo… pic.twitter.com/xo4rAoeo92— CryptoQuant.com (@cryptoquant_com) December 5, 2023
Read Bitcoins [BTC] Price prediction 2023-2024
At the time of writing, BTC was trading at $41,520.55 and the price had gone up 0.05% in the last 24 hours.
The volume on which it was traded had also increased dramatically during this period. Only time will tell if the bullish hypothesis for BTC becomes a reality in the future.
Source: Santiment