Bitcoin Price Surges Past $29,400, Here’s Why
20 Oktober 2023 - 9:45AM
NEWSBTC
The Bitcoin price has surged to a 2-month high of $29,450 today,
reflecting a 3.3% increase within the last 24 hours. While several
factors could have contributed to this rally, four principal
drivers appear to dominate discussions. #1 Expectations Of A Spot
Bitcoin ETF Approval There’s palpable excitement within the
community as rumors intensify about the US Securities and Exchange
Commission (SEC) potentially approving the first-ever spot Bitcoin
ETFs. Currently, the SEC is actively engaging with prominent
applicants including Grayscale, BlackRock, Fidelity, Invesco, and
Ark Invest, among others. This has never happened before in the
long history of Spot Bitcoin ETF rejections. It appears that the
market may be starting to cautiously price in aka “front-run” the
approval of a spot ETF. Just yesterday, BlackRock filed its updated
ETF application, adding more fuel to the fire. As James Seyffart, a
Bloomberg ETF expert, elucidated, “BlackRock filed an updated
Bitcoin ETF prospectus early this morning which is likely their
response to SEC comments like we’ve seen from Ark, Fidelity, and
others. Just more confirmation that issuers are in talks with the
SEC.” Related Reading: Bitcoin ETF Approval Anticipated To Trigger
Fiat Influx Of $24-50 Billion Forecasts surrounding this potential
approval are overwhelmingly bullish. Macro analyst Alex Kruger
predicts a 20%+ price surge on the day of approval, while trader
Christopher Inks sets his sights between $38,000 to $40,000. A
recent CryptoQuant report posits that Bitcoin spot ETFs could swell
the market cap by as much as $1 trillion, stating, “If $150 billion
in fresh capital enters the Bitcoin market, it could increase BTC’s
market cap by $450 billion to $900 billion.” Meanwhile,
Matrixport’s research predicts a Bitcoin price range between
$42,000 and $56,000 post-SEC’s approval of Blackrock’s ETF. #2
Jerome Powell’s Latest Speech In recent comments that have
undoubtedly affected the crypto markets, Federal Reserve Chair
Jerome Powell indicated the possibility of the central bank
suspending its historic run of interest-rate hikes as long as
there’s steady progress on inflation and rate hikes might be put on
hold. Powell emphasized the importance of the 2% inflation target
and addressed the balance between avoiding a potential recession
and keeping inflation in check. While raising rates too high risks
a major recession, not raising rates high enough risks another
inflationary breakout. According to current market forecasts, the
Fed will therefore not raise interest rates at the next FOMC
meeting from October 31 to November 1 and will continue to monitor
inflation data. This stance from the Fed likely provided a bullish
nudge to Bitcoin and the larger crypto market. #3 Bitcoin’s
Correlation to Gold Yesterday, the price of gold rose again by
1.3%, and since October 6, even by a whopping 10%. As NewsBTC
reported yesterday, the gold price could be a leading indicator of
the gold price. When gold rises, Bitcoin follows as a hedge against
the chaos in the US government bond market and global crises and
wars. Related Reading: Wait For Bitcoin At $20,000? This Analyst
Says No Accordingly, Charles Edwards, founder of Capriole
Investments, remarked via X (formerly Twitter) stating “The market
is starting to price in the Fed’s overtightening and weakening
economics. Combined with geopolitical tensions plus war, the need
for QE in the future is increasing rapidly. This is causing
insurance assets (Gold, Bitcoin) to absolutely rip in unison. When
both of these assets move together like this, it’s often the start
of something very big.” #4 Shorts Getting Liquidated According to
data from Coinglass, roughly $21 million in Bitcoin shorts were
liquidated in the recent move up. Thus, the futures market has
played a role in this price move. Renowned crypto trader CrypNuevo
stated via X, “All our liquidation levels to the upside from
yesterday have been hit… Asia pumped and 12h liquidation chart is
showing liquidations at the same level.” He also cautioned,
“Current long-short open positions ratio is very high atm (+4 times
more longs than shorts).” At press time, BTC saw a slight
retracement and was trading at $29,233. Featured image from
Nairametrics, chart from TradingView.com
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