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Bitcoin (BTC) price is up today, rising to an intra-day high of $37,972 before retracing below $37,000. The rally to a new year-to-date high comes as hype around a spot BTC exchange-traded fund (ETF) resulted in a wave of short liquidations, pushing prices across the crypto market higher.
Let’s look into the reasons why Bitcoin price is up today.
Institutional interest in Bitcoin boosts market sentiment
Despite a bevy of macro headwinds, Bitcoin price continues to push higher, achieving a 121% year-to-date gain and options market data shows traders angling toward the $40,000 level. The price move of the last two weeks sent the Crypto Fear and Greed index to its highest level since Bitcoin price hit the $69,789 all-time high in November 2021.
After a rush of spot Bitcoin ETF amendments in mid-October, the first window for the Securities and Exchange Commission (SEC) to approve the 12 outstanding ETFs opened on Nov. 9.
New Research note from me today. We still believe 90% chance by Jan 10 for spot #Bitcoin ETF approvals. But if it comes earlier we are entering a window where a wave of approval orders for all the current applicants *COULD* occur pic.twitter.com/u6dBva1ytD
— James Seyffart (@JSeyff) November 8, 2023
To date, the SEC has refused to approve a spot Bitcoin ETF despite numerous applicants, including BlackRock, Fidelity, ARK Invest and 21Shares. The open period for approval lasts until Nov. 17. If the SEC continues the pattern of delaying a spot Bitcoin ETF approval, remains until Jan. 10.
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According to reports, an approval may generate $600 billion in new demand. CryptoQuant analysts believe that an ETF approval will lead to a $1 trillion increase in Bitcoin’s market capitalization.
Galaxy Digital predicts a 74% price increase in the first year after a spot BTC ETF launch.
Bitcoin liquidations surge as exchange supply drops
Coinciding with Bitcoin price gains, the BTC supply on exchanges remains below the May 3, 2023 peak. Exchanges have shed over 200,000 Bitcoin since that yearly peak.
The market perceives coins leaving crypto exchanges as a bullish signal, given traders withdraw their BTC typically when they want to hold it in self-custody long-term. On Nov. 7, long-term Bitcoin holders hit an all-time in purchasing 92% of all newly BTC minted.
Related: Chainlink (LINK) pumps 26% in 6 days — Is there room for more?
With Bitcoin continuing to leave exchanges, liquidations tend to have a substantial impact on price. In the past 24-hours alone, over $126 million BTC shorts have been liquidated, with over $74.6 million in shorts being liquidated in a 12-hour timeframe.
Bitcoin price is showing some bullish momentum, which is helping BTC break out of consolidated ranges. A break from the key $37,000 resistance levels gives confidence to upward buoyancy for Bitcoin price. Such movement is leading analysts to believe that Bitcoin’s price upside has been lifted.
#btc on gas through 37k and flows in futures and options are definitively constructive:
– CME Futures OI passed 100k BTC for the first time ever. Nov Basis is trading at roughly 20%
– Implied vols are up across the curve with calls in demand, reflected in higher skew with BTC… https://t.co/Uw91k1hVWE— Kelly Greer (@kellyjgreer) November 9, 2023
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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