Bitcoin price reached $38,012 (on Binance), recording a slightly higher high. Here are the main reasons for the latest BTC price surge.
#1 Euphoria over potential ETF approvals
The crypto market has been electrified by the possibility of the United States Securities and Exchange Commission (SEC) approving several Bitcoin spot ETFs. With the approval window open from November 9 to Friday, November 17, experts like Bloomberg’s James Seyffart and Eric Balchunas estimate a 90% chance of approval for multiple filings by January 10, 2024, the final deadline for the Ark Invest filing.
Remarkably, the SEC faces a number of significant deadlines, with three spot ETF applications from Franklin Templeton and Hashdex (due November 17) and GlobalX (due November 21) awaiting decision. In this tense context, Hashdex appeared to be the first to encounter a delay, while the SEC postponed their decision regarding converting a futures ETF to one holding both futures and spot contracts.
This news momentarily shook the market, leading to a sharp but brief drop in the price of BTC, which fell from $37,400 to $36,780 in a span of five minutes. However, the market’s resilience was quickly demonstrated as 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, notably through exchange-traded products (ETPs). The recent BlackRock Bitcoin spot ETF filing contributed significantly to this rise. “Assets under management via ETPs increased by 27,095 BTC, bringing the total to a record 204,170 BTC, the equivalent of approximately $7.4 billion.” reports Search K33. This trend indicates growing institutional adoption of Bitcoin as a viable investment asset.
#3 Dynamics of supply and demand
Data from LookIntoBitcoin strong points a remarkable trend: more than 70% of Bitcoin has not been moved for at least a year. “This is a historic moment that highlights the strength of Bitcoin’s tokenomics,” the data provider shared. They added: “As long as this HODL wave continues to climb, it suggests a bullish market outlook, with long-term investors showing no signs of selling 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 on 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 indicates continued potential upside for cryptocurrencies,” Hayes said. It highlights the importance of understanding the dynamics of RRP and TGA to predict market movements.
#5 Inverse correlation with DXY
The inverse correlation between Bitcoin and the US Dollar Index (DXY) has been a notable factor in the recent Bitcoin price increase. As the DXY faced resistance and began to decline, the value of Bitcoin inversely increased. Josh, crypto analyst declared“Bitcoin PUMPS while the DXY DUMPS!”
At press time, BTC was trading at $37,467 after failing to break out of the ascending trend channel.
Featured image from iStock, chart from TradingView.com