The current price of Bitcoin is on the rise, swiftly surpassing $38,000 and sparking enthusiasm among both retail and institutional investors.
Today, Bitcoin’s price reached an intraday high of $37,972, momentarily retracting below $37,000. This surge to a new year-to-date high is attributed to heightened excitement surrounding the potential approval of a spot Bitcoin exchange-traded fund (ETF). This anticipation led to a cascade of short liquidations; propelling prices higher across the entire cryptocurrency market.
Despite facing various macroeconomic challenges, Bitcoin’s price continues its upward trajectory, boasting a remarkable 121% year-to-date gain. Market data from the options market indicates that traders are leaning towards the $40,000 level.
Over the past two weeks, this surge has elevated the Crypto Fear & Greed Index to its highest level since Bitcoin’s all-time high of $69,789 in November 2021.
Following a flurry of spot Bitcoin ETF amendments in mid-October, the Securities and Exchange Commission (SEC) began its first review window for the 12 outstanding ETFs on November 9. Historically, the SEC has been reluctant to approve a spot Bitcoin ETF despite multiple applications from major players like BlackRock, Fidelity, ARK Invest, and 21Shares. The approval window extends until November 17, with the potential for further delays until January 10.
Reports suggest that an ETF approval could generate a substantial $600 billion in new demand, with CryptoQuant analysts predicting a $1 trillion increase in Bitcoin’s market capitalization.
Galaxy Digital anticipates a significant 74% price increase in the first year following the launch of a spot Bitcoin ETF.
In tandem with the rise in Bitcoin’s price, the supply of BTC on exchanges remains below the yearly peak observed on May 3, 2023. Exchanges have witnessed a reduction of over 200,000 BTC since then.
The market interprets the departure of coins from crypto exchanges as a positive signal, as traders often withdraw their BTC for long-term self-custody. On November 7, long-term Bitcoin holders achieved an all-time high, acquiring 92% of all newly minted BTC.
As Bitcoin continues to leave exchanges, recent liquidations have had a notable impact on price. In the last 24 hours, more than $126 million in BTC shorts were liquidated, with over $74.6 million liquidated within a 12-hour timeframe. The current bullish momentum suggests a breakout from consolidated ranges, instilling confidence in the upward potential of Bitcoin’s price, according to analysts.