As Bitcoin continues its appreciating trend, everyone wonders if it will soon break past the impressive $100,000. With a current price of around $67,632.06, the buzz builds up for its next move. Several market conditions that are in play and appear to be aligning seem ripe for breaking-out events.
Institutional Involvement and Market Sentiment
While the analysis may be fragmented, one cannot negate that institutional involvement is one of the key factors that have been there from the start, driving the rally. The same development also sparks market sentiments from investors banking on strengthening.
Recent changes introduced by the U.S. Securities and Exchange Commission (SEC) which have allowed the trading of spot Bitcoin exchange-traded funds (ETFs) have boosted investor confidence. On October 18, the SEC approved rule changes that would enable the New York Stock Exchange (NYSE) and the Chicago Board Options Exchange (CBOE) to list options on several spot Bitcoin ETFs. This is a big step forward for the market as more money from institutional funds is expected to flow into Bitcoin.
This would mean a less bumpy price movement, higher liquidity, and wider participation in the market. Latest data from CoinGlass suggests the spot Bitcoin ETF total assets under management rose to as high as $52 billion by mid-October, which is indicative of healthy demand coming from institutions.
The Role of Market Sentiment
This also had a huge effect on the market sentiment related to Bitcoin. The crypto fear and greed index, which measures investor sentiment and was proved to be at 63, thus showing “greed,” was the most prominent indicator of this. That is in sharp contrast to what went down during the whole month of September with how fear dominated the markets. The positive feeling might be perpetuated through recent bullish developments as well as the hopes for beneficially favorable regulatory changes.
However, uncertainty crept in with the scheduled U.S. presidential election on 5 November. Former President Donald Trump has already spoken on crypto-friendly policies that make him a darling for crypto investors; however, Kamala Harris still hasn’t voiced a word regarding digital currencies. Thus, the election result could be a turning point for Bitcoin’s price direction in the following months according to how policies fall.
Spot Bitcoin ETFs and a Potential Breakout
Market analysts have long predicted a breakout with prices stuck at around $70,000 with Bitcoin. A “Boring Zone” according to Crypto analyst Michaël van de Poppe, is the area where that price starts consolidating and building momentum towards a big rally, especially during high liquidity.
Increased speculative activities are also reflected in the surge of Bitcoin CME Futures Open Interest to a record high of $12 billion. This also increases open interest, which shows more players have a vested interest in the next price movement of Bitcoin and thereby are expecting to break anytime.
Technical Indicators and Market Confidence
This also is another indication of the bullish trend of Bitcoin from the viewpoint of some key technical metrics. Market value to realized value, or MVRV, had recently gone positive. It is generally a bullish sign when the momentum of MVRV is positive, which generally suggests that the price of Bitcoin is going to continue its uptrend as the confidence of the investors increases. There is less selling happening as the sellers have started becoming scarce.
The optimism is magnified with this closing of the re-accumulation phase, a classic part of the pattern in Bitcoin price cycles. This usually happens after a price correction period when investors buy into Bitcoin, expecting the next big price surge. Analysts now believe that Bitcoin might even go to the coveted $100,000 sooner than anticipated with this closure of the re-accumulation phase.
Impact of U.S. Elections and Federal Reserve Policy
Of course, the macroeconomic event that will most influence Bitcoin’s trajectory is the election in the United States. But another interesting macroeconomic event is the decision of the Federal Reserve on interest rates scheduled for November 7. There is a 90.5% chance of a 25 basis point rate cut. More liquidity to the economy can then flow into the riskier assets, which can include Bitcoin. The perfect storm for Bitcoin might therefore come with both the victory of Trump and a federal rate cut that drives the price of Bitcoin over $70,000.
What Lies Ahead for Bitcoin?
Bitcoin’s price has stabilized around $68,000, the next big resistance point would be at $90,000, in the opinion of many technical analysts. That said, in case Bitcoin manages to break through this level, its price could surge to well and beyond $100,000. Of course, some analysts even go on to project that Bitcoin might even go all the way to the moon: a couple of pages past $160,000.
While the outlook is still positive, investment decision-making must take a more careful approach, with greater concern for economy-wide factors before final decisions are made. Bitcoin’s move upward has been fueled by institutional interest, rapid changes to regulatory environments, and larger macroeconomic shifts. Of course, investors have to do their research and manage risk appropriately.
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