The crypto world is experiencing a frenzy surrounding the price of Bitcoin (BTC). In the last week, BTC has recovered losses and shows an increase of 0.90%. Over a broader period, the month has been even more impressive, with a cumulative gain of 5.97%. But what is driving this boom and how will it affect the market?
On the one hand, the anticipation of the next Bitcoin halving, an event that occurs every 210,000 blocks and that has a significant impact on the Bitcoin money supply. Its goal is to reduce the pace of Bitcoin issuance, and the next halving is expected to take place between May and April 2024, which will reduce the reward to 3,125 BTC per mined block.
On the other hand, euphoria is triggered by the anticipation of the approval of Bitcoin exchange-traded funds (ETFs) in the United States. The Securities and Exchange Commission (SEC) recently made a landmark decision by not appealing a court ruling in favor of Grayscale in its application for a spot Bitcoin ETF.
This development has generated widespread excitement in the market, and investors are betting that Bitcoin ETFs will be a reality in the near future.
A Double Impulse Awakens FOMO
This double push of news has led Bitcoin to a constant rise in its price, this rally marks a return to the bullish trend that has characterized the cryptocurrency market in recent times.
The market has reacted to the news hastily, as illustrated by Bitcoin briefly rising above $30,000 following unconfirmed rumors online about the approval of a Bitcoin ETF. While these rumors turned out to be unfounded, the mere expectation that ETFs could be approved has boosted the price generating some FOMO.
The SEC had previously delayed reviewing Bitcoin ETF applications until January 2024. This delay raised approval expectations and was further strengthened by the SEC’s decision not to appeal the Grayscale ruling.
“News about Grayscale ETF filing has significant ramifications for the Bitcoin market. Spot price ETF approval has been a dominant narrative in the market for several months”
highlights Simon Peters, eToro market analyst.
Investors Seek Higher Prices in Bitcoin
Investors in the Bitcoin market are clearly seeking higher prices, and this trend is reflected in the liquidations of short positions we have seen over the past five days, as shown in the chart provided by @bitcoinnewscom.
NEW: Shorts get liquidated, bulls get excited! 🔥
Cumulative Liquidation Levels Delta reveals that increasing short positions have been liquidated in the last 5 days, implying that investors are betting on higher prices. 🙌 pic.twitter.com/l0aF05lv3e
— Bitcoin News (@BitcoinNewsCom) October 16, 2023
These sell-offs indicate that investors are betting on an increase in the price of Bitcoin, supporting their confidence in the bullish outlook as they wait for factors such as the halving and the possible approval of an ETF to further boost the cryptocurrency’s value. leader.
Despite the current optimism, investors should remember that cryptocurrency investments carry risks. Market volatility can lead to sharp and unpredictable changes in prices. Therefore, it is essential to consider risk management strategies such as dollar cost averaging (DCA).