The Bitcoin Rally: What’s Behind the Surge?
If you’ve been following the crypto market, you’ve probably noticed the significant increase in the Bitcoin price, which has surged by more than 4% in the last 24 hours, reaching $36,800. But what’s driving this rally?
#1 Spot Bitcoin ETF Buzz
One key factor contributing to the surge is the renewed speculation about the potential approval of a spot Bitcoin exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC). Bloomberg’s James Seyffart believes there is a unique opportunity for the SEC to approve all 12 spot ETF applications within the next eight days. This news has fueled anticipation of an approval before January 10, 2024.
Grayscale’s active discussions with the SEC regarding the conversion of its GBTC trust into a spot ETF have added to this buzz, following their recent court victory over the SEC on August 29.
#2 Bitcoin Whales
Another contributing factor is the increased activity by Bitcoin whales, indicating market optimism. Notable crypto analysts have pointed out substantial purchases by whales and shifts in liquidity in the market, as well as an increase in TWAP buying on Coinbase.
#3 Short Squeeze
The Bitcoin market has experienced a significant short squeeze, with approximately $51 million in BTC short positions being liquidated today. This marks the largest short squeeze since October and has caught some traders off guard.
#4 Bitcoin Supply Dynamics
Furthermore, the supply of Bitcoin on exchanges has been steadily decreasing, reaching a six-year low at the end of October. On-chain data also reveals that a significant 76% of the Bitcoin supply is currently held by long-term holders who haven’t moved their coins for over 155 days.
Hot Take: The Future of Bitcoin
The recent surge in Bitcoin’s price can be attributed to various factors such as anticipation of a spot ETF approval, increased whale activity, short squeezes, and supply dynamics. These developments suggest growing optimism and interest in Bitcoin as it continues to make headlines in the crypto world.
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