Bitcoin (BTC) has experienced a strong rally and short squeeze, pushing its price above $35,000 on October 23. Currently, it is battling to hold the $34,000 level. After months of consolidation, Bitcoin’s upward move broke through the $32,000 resistance, leading to speculation on its next moves.
Charles Edwards, the founder of Capriole Investments, noted that Bitcoin’s rally melted the $32,000 resistance “like butter.” He believes that the upcoming monthly resistance is unlikely to be a hurdle and expects either a rapid continuation to the mid-range of $43,000 or short-term consolidation between support and resistance at $32,000 to $35,000 before continuation.
The recent fervor over a potential Securities and Exchange Commission (SEC) approval of a spot Bitcoin exchange-traded fund (ETF) is thought to be one of the catalysts for the current price rally. Alongside this, there are several other factors contributing to the market’s bullish sentiment.
Paul Sztorc, the founder of LayerTwo Labs, believes there are meaningful indications of a broader decoupling of Bitcoin from equities, which has surprised many market participants. He suggests that concerns related to foreign conflicts and rising macroeconomic uncertainty previously had traders expecting a dip in the market. However, Sztorc points to historical examples like the U.S. regional banking crisis, where Bitcoin outperformed during a similar divergence. He believes traders and investors are now accumulating Bitcoin ahead of an anticipated event.
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Sztorc adds that expectations of the Federal Reserve easing monetary policy due to rapidly rising yields could also be driving greater accumulation. Traders may be anticipating the Fed resorting to some form of yield-curve control, leading to monetary debasement.
Further evidence of institutional investors warming up to Bitcoin and the potential approval of a spot BTC ETF comes from the Chicago Mercantile Exchange (CME). Bitcoin open interest on CME has surpassed 100,000 BTC, a new record. This suggests that institutional investors accumulating spot Bitcoin are hedging their positions, leading to increased volumes and open interest at CME and other platforms.
It is important to note that this article does not offer investment advice or recommendations. Every investment and trading decision carries risks, and readers are advised to conduct their own research before making any decisions.
