ALBAWABA- Following a strong October, or Uptober as traders like to call it, Bitcoin has recently surged by 7% in the last few weeks to break the $37,900 barrier, a level not seen since May 2022. This impressive bitcoin rally, which has sparked speculation about a possible bull market resurgence, is supported by a convergence of factors indicating a sustained upward trajectory in the cryptocurrency market.
1. Milestones and Breakthroughs: Bitcoin's ETF
The fact that bitcoin’s latest price surge has breached and stabilized at above $ 37,000 shows an encouraging trend among industry activities. It is a burst that ended years of low fluctuation and trade volume on top of establishing the bitcoin above leading indices like SPX and DOW.
This rally is fuelled by the expectation that United States regulators will give approval to the first spot Bitcoin ETF. This appraisal is projected to re-energize the interest of institutional as well as retail investors, thus, generating more wind for the rising crypto market wave.
2. Bullish Traders and Technical Support
In the cryptocurrency derivatives market, where large bets are being placed, there is evidence of trader bullishness pushing prices higher. Notably, the existence of call options on Bitcoin that expire near significant price points like $40,000 and $50,000 indicates a strong belief in additional price growth.
Technical analysis aligns with the sentiment of a continued rally. Analysts, including Katie Stockton from Fairlead Strategies, indicate that a breakout beyond current levels could encounter resistance near $42,200. This technical backdrop is further emphasized by Alex Kuptsikevich, who characterizes Bitcoin's current levels as "low-density territory," historically associated with significant growth during bull markets.
3. Supply Constraints and Long-Term Holder Behavior
Bitcoin's supply is facing historical tightness, with long-term holders displaying a reluctance to sell near all-time highs. Analysts at Glassnode emphasize the scarcity of tokens, suggesting that in a market where bullish traders are actively seeking crypto assets, this supply constraint has the potential to amplify gains.
Glassnode's analysts express enthusiasm about the upcoming months, setting the stage for an exciting period for Bitcoin investors. This sentiment extends to the broader crypto market, where altcoins like Ether, Cardano, and Polygon have also witnessed substantial gains. Also, the upcoming of one of the most anticipated events on the Bitcoin calendar is the halving, which reduces the rate of new coin issuance by 50% and happens every 210,000 blocks. The fourth halving is scheduled to happen at block-height 840,000, but because mining blocks are stochastic and naturally variable, it is impossible to pinpoint the precise day and time.
Based on the current average block interval, our best estimate indicates that the halving will occur on April 23, 2024, which is 158 days away.
4. Total Value Locked and Trade Volumes Surge
The bullish sentiment in the crypto market is reflected in Bitcoin and crypto market trading volumes, which reached $44.1 billion on November 9, the highest level since March 14. Furthermore, the total value locked (TVL) increased by 3.7% in a 24-hour period to $46.5 billion.
This increase in trading volume and TVL is viewed as a positive sign, potentially breaking the two-year losing streak in November returns.
While the cryptocurrency market is experiencing a surge driven by institutional interest, increased trading volumes, and positive sentiment, it is critical to recognize lingering risks. Potential risk events could have an impact on prices, and the market's reaction to new enforcement actions or an economic downturn will almost certainly shape its future direction.
To summarize, the current positive trajectory in the cryptocurrency market indicates a break from the bear market, with the potential for continued price volatility. With increasing institutional interest and trading volumes, the crypto market appears to be in for an exciting period ahead.
