Bitcoin Price Consolidates at $34,500 as Bulls Hold Strong
After reaching a high of $35,000 earlier this week, the price of Bitcoin has been consolidating at around $34,500. This consolidation comes as investors anticipate the approval of the first US exchange-traded funds (ETFs) that directly invest in cryptocurrency. The key question now is whether the approval of these ETFs will lead to some investors taking profits.
Hayden Hughes, co-founder of social-trading platform Alpha Impact, believes that if the Bitcoin spot ETF is approved, there may be a sell-off in the market. Despite this uncertainty, Bitcoin has seen a 16% surge this week and briefly surpassed $35,000, a level it hasn’t reached since 2022.
Bitcoin’s rally has diverged from other risk-on assets such as US equities, which have been struggling due to rising long-term Treasury yields and geopolitical uncertainties. However, it remains to be seen how long Bitcoin will continue to outperform US equities.
Technical Analysis and Derivatives Data
There is a potential challenge for Bitcoin’s rebound just below the $36,000 level. This zone is marked by the 38.2% Fibonacci retracement of Bitcoin’s decline until November 2022. Additionally, the weekly relative-strength index (RSI), a momentum indicator, recently crossed the 70 level for the first time since 2021. An RSI reading above 70 is typically considered “overbought,” indicating lower chances of rapid rallies like the recent 10% intraday surges.
Deribit, the largest cryptocurrency options exchange, has reported significant accumulation of bullish wagers on Bitcoin reaching $40,000 by the end of the year. This would represent a 16% increase from current price levels.
Bitcoin vs. Gold
Bitcoin’s recent rally seems to be stealing attention away from gold. Bloomberg’s Senior Macro Strategist, Mike McGlone, believes that the dynamics between Bitcoin and gold are changing. The upcoming approval of US spot Bitcoin ETFs is likely to solidify Bitcoin’s position as a mainstream asset, potentially eroding gold’s relative standing.
Hot Take: Bitcoin’s Rally Continues Amidst ETF Approval Expectations
The price of Bitcoin has been consolidating around $34,500 after reaching a high of $35,000. Investors are eagerly awaiting the approval of the first US exchange-traded funds (ETFs) that directly invest in cryptocurrency. However, there is uncertainty as to whether the approval of these ETFs will lead to a sell-off in the market.
Bitcoin has seen a 16% surge this week and briefly surpassed $35,000. It has outperformed other risk-on assets such as US equities, which have been struggling due to rising long-term Treasury yields and geopolitical uncertainties.
Technical analysis suggests that there may be a challenge for Bitcoin’s rebound just below the $36,000 level. The weekly RSI has crossed the 70 level for the first time since 2021, indicating lower chances of rapid rallies.
Deribit has reported significant accumulation of bullish wagers on Bitcoin reaching $40,000 by year-end. Meanwhile, Bitcoin’s rally is shifting attention away from gold, potentially eroding its relative standing.
In conclusion, the approval of US spot Bitcoin ETFs is expected to further solidify Bitcoin’s position as a mainstream asset. It remains to be seen how this will impact its future performance and whether it will continue to outperform other assets.
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