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Bitcoin Holds Steady as Traders Remain Bullish

2 Mins read

Bitcoin was little changed on Friday, maintaining its elevated levels following a recent rally as traders continue to be optimistic. However, the real standout performer was the second-largest cryptocurrency, Ether, after BlackRock filed for an Ether exchange-traded fund.

Bitcoin’s Price Holds Strong

Over the past 24 hours, the price of Bitcoin has declined by less than 1% to $36,000. While this represents a decrease from Thursday’s peak near $38,000, which was the highest level since early May 2022 before the crypto market plunged into a bearish phase, Bitcoin has still experienced an impressive rally of over 30% within a month. This has marked a significant departure from the historically low volatility and trading volumes that Bitcoin had been experiencing for a prolonged period.

Factors Driving Bullish Momentum

One possible explanation for this strong bullish momentum is the low circulating supply of Bitcoin in the market. Approximately 90% of Bitcoins in circulation have remained unchanged for over three months, leaving only 10% available to new investors. As a result, the price is being pushed even higher as these new entrants compete for the limited supply. Rachel Lin, CEO of trading platform SyFutures, commented on this phenomenon, stating, “The data also suggests a strong bullish bias in the derivatives market,” pointing out that call options contracts, which are bullish bets on rising prices, are concentrated around price targets at $40,000, $45,000, and $50,000.

Bitcoin’s Outperformance

Interestingly, while all risk-sensitive assets susceptible to higher borrowing costs have been lifted by recent optimism regarding interest rates reaching their peak, Bitcoin has significantly outperformed traditional markets such as the Dow Jones Industrial Average and S&P 500.

Bitcoin’s Rally Driven by Expectations of ETF Approval

Bitcoin has been experiencing a significant surge in performance recently, largely driven by the anticipation of regulatory approval for the first spot Bitcoin exchange-traded fund (ETF). This approval is expected to generate a new wave of investor interest in cryptocurrencies. Since BlackRock and other traditional financial giants filed for their own spot Bitcoin ETFs earlier this summer, traders have become increasingly confident that approval will come sooner rather than later.

BlackRock (BLK), a leading asset manager, is once again making waves in the crypto market. After their filing for a Bitcoin ETF propelled prices to new heights in the summer, the revelation of their Ether ETF filing has caused the price of the second-largest token to reach its highest level in 18 months. Over the past 24 hours, Ether has surged by 10%, surpassing the $2,100 mark and peaking near $2,150.

“The application for an Ethereum Spot ETF by BlackRock further confirms the investment world’s readiness to embrace crypto assets,” states Bradley Duke, chief strategy officer at exchange-traded product group ETC. He believes that if the SEC approves a spot Bitcoin ETF, it would only make sense for a spot Ethereum ETF to follow closely.

In addition to Bitcoin and Ether, smaller tokens or altcoins are also experiencing growth. Cardano, for instance, has seen a 2% increase, while Polygon has surged by 3%. However, memecoins such as Dogecoin and Shiba Inu have seen less positive movement, with Dogecoin dropping by 1% and Shiba Inu shedding 3%.

This recent development highlights the growing acceptance and adoption of cryptocurrency assets within the investment community. As the crypto market continues to evolve, more opportunities are emerging for investors to diversify their portfolios.

Written by: Jack Denton

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