With Bitcoin hovering around $70K, could $100K be on the horizon? What influence will the U.S. elections, ETF approvals, and market outlook have on its future trajectory?
Bitcoin is bitcoining
Bitcoin (BTC) has embarked on a remarkable bull rally, appreciating by over 2% in the past week as the “Uptober” phenomenon drives enthusiasm in the crypto market.
As of October 21, BTC is priced at $67,100—a mark not reached since late July, representing a three-month high. Notably, BTC briefly peaked at $69,500 before bears intervened to temper the rally.
The market sentiment is rapidly evolving. The crypto fear and greed index now stands at 63, indicating “greed,” a significant contrast to the yearly low of 26 recorded on September 7 when fear was pervasive.
Investor optimism is palpable, especially with the U.S. presidential election looming on November 5. Former President Donald Trump, who has shown support for crypto-friendly policies, is gaining traction in the polls.
Many believe his potential victory could drive Bitcoin to unprecedented levels, as his policies are perceived as advantageous for the crypto sector.
What lies ahead for BTC? With crucial economic events approaching and a politically charged environment, what direction might BTC take in the upcoming days? Let’s delve into it.
Spot Bitcoin ETFs gain traction as positive changes roll in
In a significant victory for the Bitcoin landscape, spot Bitcoin exchange-traded funds are poised for increased activity following a recent regulation change by the U.S. Securities and Exchange Commission.
On October 18, the SEC sanctioned a new rule allowing the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange to facilitate options trading for various spot Bitcoin ETFs. This development paves the way for enhanced liquidity and smoother price fluctuations in the crypto sphere.
Major players are affected by this ruling. The NYSE now has the approval to offer options for the Grayscale Bitcoin Trust (GBTC), Grayscale Bitcoin Mini Trust (BTC), and Bitwise Bitcoin ETF (BITB).
Meanwhile, Cboe Global Markets can now list options for the Fidelity Wise Origin Bitcoin Fund (FBTC) and the ARK 21Shares Bitcoin ETF (ARKB).
These advancements come just weeks after the SEC permitted Nasdaq to list options for BlackRock’s iShares Bitcoin Trust (IBIT).
Options are financial contracts that afford investors the right—though not the obligation—to buy or sell an asset at a predetermined price before a specified date. In this case, the underlying asset is a Bitcoin ETF.
While exact launch dates for these options remain unconfirmed, experts believe this approval could significantly influence the market.
An increase in financial products on major U.S. exchanges means broader access to crypto, likely attracting a diverse range of participants from institutional investors to everyday traders.
The timing is highly opportune. Bitcoin ETFs have witnessed an impressive influx of funds recently. According to data from CoinGlass, spot Bitcoin ETFs garnered over $2.13 billion in inflows during the week ending October 18, pushing total assets under management to a robust $52 billion.
The inflows recorded last week marked the strongest performance for Bitcoin ETFs in approximately seven months, indicating a rising investor confidence in crypto.
Is a breakout imminent?
As Bitcoin flirts with the $70K threshold, numerous experts have taken to social platforms to share their predictions about the market’s forthcoming movements.
Bitcoin is in the “Boring Zone”
Crypto analyst Michaël van de Poppe has characterized Bitcoin’s current state as being within the “Boring Zone.” However, this should not be misconstrued as bad news.
Bitcoin has been consolidating around the $68,000 mark, while behind the scenes, altcoins have begun to exhibit signs of recovery.
As van de Poppe suggests, this phase mirrors a coiled spring anticipating a jolt of liquidity. “Altcoins are currently reversing and concluding the longest bear market in history,” he comments.
This “Boring Zone” serves as a critical juncture for Bitcoin, where prices linger within a narrow range while hidden momentum builds. Historically, similar phases in Bitcoin’s price movements have resulted in significant upward surges, as investors re-enter once they perceive a firm support level has formed.
Bullish momentum signals are emerging
On the technical side, Ali, another well-known crypto analyst, is monitoring a specific metric to determine Bitcoin’s next move.
The market value to realized value momentum indicator—which assesses Bitcoin’s current price against the price at which most BTC was last transacted—has recently turned bullish.
When this indicator signals bullishness, it often suggests impending price gains. Essentially, it indicates that holders are confident, believing the market is ready for a lift—a crucial psychological element in price dynamics.
As investors maintain their Bitcoin holdings, selling pressure diminishes. This reduction in selling pressure facilitates upward momentum, propelling Bitcoin higher.
Increasing open interest
Another significant factor is the uptick in Bitcoin CME Futures Open Interest, which has recently reached an all-time high of $12 billion, as highlighted by Maartunn, a crypto futures specialist.
Open interest represents the total number of futures contracts that remain unsettled. A rise in open interest suggests that more traders are confident in speculating on Bitcoin’s future price movements.
The increase in open interest fits into the broader narrative of Bitcoin’s current momentum. Traders appear to be anticipating a breakout, likely propelled by macroeconomic influences.
However, there’s a caveat—higher open interest can occasionally lead to increased volatility, particularly if a large number of traders hold similar positions, be it bullish or bearish. A market shift against those positions could trigger liquidations, resulting in sudden price fluctuations.
U.S. elections and Fed rate adjustments
Macroeconomic elements are also at play, with the U.S. presidential election on November 5 and the Federal Reserve’s subsequent meeting on November 7 likely swaying Bitcoin’s price behavior.
Former President Donald Trump, a leading figure in several polls, is perceived as being pro-crypto. His possible success might propel Bitcoin’s price upwards as investors gain confidence in clearer regulations and industry support.
Conversely, uncertainty surrounds a potential victory by Kamala Harris, who has yet to clarify her position on cryptocurrency.
Additionally, the Federal Reserve’s impending decision regarding interest rates looms large. Currently, there’s a 90.5% probability that the Fed will lower rates by 25 basis points during the November 7 meeting.
A rate reduction would infuse fresh liquidity into the economy, typically benefiting risk assets like Bitcoin. Increased liquidity translates to more capital flowing into markets, potentially boosting Bitcoin directly.
If both a Trump win and a Fed rate cut come to pass, the resulting scenario could create an ideal environment for Bitcoin’s price to surge past $70K.
Where could Bitcoin head next?
One crypto analyst suggests that Bitcoin’s next significant target could be $98,000. A prevailing sentiment within the community indicates that momentum is building, with increasing confidence that BTC is poised for a move upward.
Meanwhile, renowned crypto analyst Rekt Capital has analyzed that we are currently fluctuating within the $65,000 to $70,000 range, with potential major targets between $90,000 and $160,000.
As Bitcoin fortifies itself around the $70K level, the next substantial resistance could be $90K. However, should Bitcoin surge past $90K with robust momentum, it may rapidly accelerate toward $100K and beyond.
This occurs because once Bitcoin enters a price discovery phase (trading above former all-time highs), market exuberance often propels prices significantly higher in a relatively brief period.
At present, momentum appears in favor of Bitcoin’s ascent. Nonetheless, investors should stay alert, closely monitoring both technical indicators and broader economic signals to gauge BTC’s future movements. As always, trade judiciously and never invest more than you can afford to lose.
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