Bitcoin jumped above $ 57,600 and then plummeted near $ 2,000

Bitcoin jumped above $ 57,600 and then plummeted near $ 2,000

Analysts attribute the recent rally in Bitcoin to waiting for the US Securities and Exchange Commission (SEC) to make a decision on a Bitcoin ETF next week. Nevertheless, ETFs currently awaiting SEC approval are based on Bitcoin futures and would not invest directly in Bitcoin.

The approval of a Bitcoin ETF, either based on futures or using Bitcoin itself, was previously seen as an important milestone in getting Bitcoin accepted as a mainstream financial asset and will provide access for more people to invest in the space of the cryptocurrencies.

On the other hand, Shiba Inu is now the fifteenth largest coin. The dog-based coin has now shot up to 15th place on the cryptocurrency chart by market capitalization, with a market capitalization of $ 11.85 billion. The cryptocurrency has risen nearly 300% in the month so far.

Expectations on Bitcoin

In his most recent analysis of the Bitcoin (BTC) market, analyst Willy Woo stated that, with the recent rally in its price, this cryptocurrency had already left the discount levels it previously showed. With the accumulation at maximum levels, the analyst assures, Bitcoin price action could enter a strong rally in the months to come, which would continue for much of 2022.

Woo notes that heavy purchases of BTC by long-term holders have slowed, while there is a moderate level of profit-taking by speculators. “The overall picture is neutral, and there is no more information coming from the on-chain data,” the analysis notes.

A heightened level of speculation is on the horizon on Bitcoin derivatives exchanges as the potential approval of a Bitcoin ETF by the US Securities and Exchange Commission (SEC) is awaited, Woo says. “The speculation around this event outweighs the effect of supply and demand, which is quite neutral at present.” In this sense, it could be a catalyst for the next direction of the price of Bitcoin.

Long-term holders, for their part, have reached a peak of accumulation. “Based on past behavior, we will have possibly two or more months before the resulting supply shock manifests itself and propels the price into a multi-month rally.“, highlights the analyst in his most recent bulletin.

In the medium term, the indicators show that of Bitcoin investors with a strong tendency to accumulate and retain, they reflect that “we are in a neutral area, it is not bullish or bearish.”

At present, neutral activity is evident, while the dotted circles show three areas of intensive sales. The study highlights that the current rally started after a divergence zone, in which sales intensified, but the price fell. Another point of view is when looking at the net flow of Bitcoin on exchanges. Most of the buying activity took place in September, however, it was only after the start of October that the reaction was seen, with a bullish rally.

Meanwhile, from the Bitcoin supply shock, it is appreciated that while speculative investors have been taking profits (the low supply shock), cumulative investors have retained their BTC, that is, they have remained neutral.

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