Bitcoin and other cryptocurrencies experienced a surge on Tuesday, fueled by growing optimism surrounding the imminent launch of a spot Bitcoin exchange-traded fund (ETF). This development is considered a significant catalyst for the crypto market, with potential long-term support for prices.
Over the past 24 hours, the price of Bitcoin skyrocketed by more than 12%, reaching approximately $34,400. It even briefly exceeded $35,000, marking its highest point since May 2022. This surge comes after a period of 17 months characterized by several prominent collapses that plunged the crypto market into a deep bearish state. Interestingly, Bitcoin has recently surged by around 30% within just 10 days, effortlessly surpassing the trading range of $26,000 that had persistently held for nearly two months during a remarkably stable period for crypto markets.
Antoni Trenchev, co-founder of crypto lender Nexo, commented on this remarkable uptrend, stating, “ETF mania finally propelled it above this year’s pivotal resistance area of $31,000 to $32,000. It seems nothing will deter this ETF enthusiasm, and it’s only a matter of time before a spot Bitcoin ETF gets approved by the SEC, likely a whole stack of ETFs.”
Crypto enthusiasts are closely monitoring developments surrounding the potential conversion of the Grayscale Bitcoin Trust into an ETF, as well as awaiting the approval of spot Bitcoin ETFs applied for by BlackRock and other financial firms. The launch of spot Bitcoin ETFs would represent a significant milestone for cryptocurrencies since these funds would hold the actual token instead of futures contracts held by existing funds.
The prospect of a spot Bitcoin ETF has been anticipated for months, as it is expected to unleash a new wave of interest from retail and institutional investors, facilitating broader adoption of digital assets. It’s worth noting, however, that the approval of any spot Bitcoin ETF would require the green light from the Securities and Exchange Commission (SEC), an institution known for its stringent stance on cryptocurrencies. While the launch of these ETFs appears increasingly likely, there may still be hurdles to overcome along the way.
Bright Side for Bitcoin in the Stock Market
Traders have been continuing to find optimism in the world of Bitcoin, resulting in its significant outperformance compared to the Dow Jones Industrial Average and S&P 500 in recent days. Several recent developments have played a role in this trend.
Legal Win for Grayscale against the SEC
Grayscale’s legal victory against the Securities and Exchange Commission (SEC) was officially confirmed by a federal appeals court on Monday. This has placed Grayscale’s application for conversion back in the hands of the regulator.
iShares Bitcoin Trust Listing
Furthermore, BlackRock’s iShares Bitcoin Trust has been listed on the Depository Trust & Clearing Corporation (DTCC). This is typically considered a precursor to the potential trading of an Exchange-Traded Fund (ETF), although it does not guarantee it.
Bitcoin’s Next Price Movement
Nexo’s Trenchev believes that Bitcoin’s recent surge needs to settle before any further notable price movement can be expected. From a technical standpoint, the momentum indicators are showing signs of being overstretched across the one-hour to one-day timeframes.
Bullish Outlook from Market Observers
On the other hand, several market observers maintain a more optimistic view:
- Alex Kuptsikevich, an analyst at broker FxPro, regards the range between $31,000 and $46,000 as an area with little resistance. He suggests that the market quickly broke through this range last year and advises being prepared for a similar move this time around.
- Katie Stockton, managing partner at technical research firm Fairlead Strategies, remains short-term bullish due to positive momentum indicators. She predicts a “decisive” breakout for Bitcoin, targeting resistance just shy of $36,000 in the fourth quarter of this year.
Strong Performance Across the Crypto Market
Bitcoin’s success is not limited to its own gains. Other cryptocurrencies have also experienced significant surges:
- Ether, the second-largest token, has advanced 9% to reach $1,825.
- Altcoins such as Cardano have climbed 7%, while Polygon has experienced a 6% increase.
- Memecoins like Dogecoin and Shiba Inu have also seen gains, rising by 6% and 5% respectively.
In conclusion, Bitcoin’s recent performance has been highly positive, leading the way for other cryptocurrencies to follow suit. Despite some technical caution, market observers and traders remain optimistic about the future of Bitcoin in the stock market.