Bitcoin price increased marginally, rising as high as $38,012. The main reasons for the recent increase in BTC price are wondered. Here are the reasons for the rise…
Potential Bitcoin ETF has everyone excited
The crypto market has been excited by the possibility of the US Securities and Exchange Commission (SEC) approving several spot Bitcoin ETFs. Experts such as Bloomberg’s James Seyffart and Eric Balchunas say there is a 90% chance of multiple applications being approved by the January 10, 2024 deadline for Ark Invest’s application, with the approval window opening on November 9th running through Friday, November 17th. guesses.
Notably, the SEC faces a significant set of deadlines in which three applications for spot ETFs by Franklin Templeton and Hashdex (filing deadline Nov. 17) and GlobalX (filing deadline Nov. 21) are awaiting decision. In this tense environment, Hashdex became the first company to face a delay when the SEC postponed its decision to convert from a futures ETF to both a futures and spot ETF. This news momentarily shook the market, causing a sharp but short-lived decline in the price of BTC. BTC fell from $37,400 to $36,780 in five minutes. However, Bitcoin surpassed its pre-announcement price within 25 minutes.
Unique corporate attention
Institutional demand for Bitcoin has reached new highs, particularly through exchange-traded products (ETPs). The recent BlackRock Bitcoin spot ETF application contributed significantly to this increase. According to K33 research, “Assets managed through ETPs increased by 27,095 BTC, reaching a total of 204,170 BTC, or approximately $7.4 billion.” This trend indicates increasing institutional adoption of Bitcoin as a viable investment asset.
Supply and demand dynamics for Bitcoin are evolving
Data from LookIntoBitcoin highlights a notable trend. According to data, more than 70% of Bitcoin has not been moved for at least a year. “This is a historic moment that underscores the tokenomic power of Bitcoin,” the data provider shared. Additionally, “As long as this HODL Wave continues to climb, it indicates 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 increased institutional interest.”
FED’s liquidity injection also affected the market
BitMEX co-founder Arthur Hayes commented on the significant liquidity injected into the market and its impact on cryptocurrencies. “Keep your eyes on the prize. Almost $200 billion in liquidity has been added since the beginning of November, affecting assets like Bitcoin. “This indicates a potential upside trend for cryptocurrencies,” says Hayes. Hayes emphasizes the importance of understanding RRP and NPL dynamics in predicting market movements.
Inverse correlation with DXY continues
The inverse correlation between Bitcoin and the US Dollar Index (DXY) has been a notable factor in Bitcoin’s recent price increase. As DXY encountered resistance and began to decline, Bitcoin’s value conversely increased.
What’s next for Bitcoin?
Markus Thielen, research director of Matrixport and founder of DeFi Research, predicts that Bitcoin’s upward trend will continue and reach $40,000 or even $45,000 by the end of the year. Thielen attributes this optimism to positioning in the options market and expectations for a dovish FED. The surge in demand for call options, particularly the 40,000 option, has exposed market makers to the ongoing rise in the cryptocurrency, leading them to hedge their positions by purchasing BTC. Thielen states that two important options expired in November and December, with a total open position of $9.1 billion.
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