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Bitcoin ETF and Halving Fuel Price Rises

The Crypto currency sector is currently hyped up as Bitcoin continues to go on an epic bull run reaching new highs not seen since November 2021. At current Bitcoin is USD 48 dollars short of USD 57,000 and not showing any signs of retreating.

The market is anxiously waiting to see if 2024 will deliver the USD 100,000 price point but it is still too early to tell or even make that call just yet. The way the market behaves also makes it too volatile and unpredictable to make that call so early in this year. But there are high hopes.

As Bitcoin (BTC) approaches the three-month mark since the approval of eleven spot Bitcoin ETFs by the U.S Securities and Exchange Commission, the crypto currency market is witnessing a remarkable surge in prices reminiscent of the highs seen in November 2021. The recent rally, fuelled by a combination of ETF buying frenzy and anticipation surrounding the upcoming Bitcoin halving event in mid-April, has sent Bitcoin prices spiralling upwards, rekindling the excitement among traders and investors alike.

Impacts of Bitcoin-ETF and Halving

Since the approval of these ETFs, particularly the BlackRock-run Bitcoin ETF which has already seen over $6.6 billion in inflows, Bitcoin's price has surged from USD 46k to around USD 56.5k as of recent trading sessions. This is a 140% price increase on the number 1 digital asset. This surge in demand, driven by a wider range of customers gaining access to Bitcoin through ETFs show cases the growing mainstream acceptance and adoption of crypto currencies as a legitimate investment asset.

The upcoming Bitcoin halving event, expected in mid-April, further adds to the bullish sentiment surrounding Bitcoin. As the block rewards are set to be cut from 6.25 to 3.125, effectively reducing the supply of new Bitcoins entering circulation, traders are betting on this scarcity to drive prices even higher. This anticipation has fueled heavy buying activity, propelling Bitcoin to break above key resistance levels and pushing towards its previous all-time high of USD 68,800 seen in November 2021.

Ethereum Next To Boom

Ethereum (ETH), the second-largest crypto currency by market capitalization, is also riding on the coattails of Bitcoin's rally. The expectation of spot Ethereum ETF approvals by the end of May has boosted market sentiment, with traders eyeing a potential breakout above the late-March 2022 high at USD 3,582. This further adds to the overall optimism in the crypto currency market, signalling a broader bullish trend that extends beyond Bitcoin alone.

The recent surge in Bitcoin prices has not only impacted the crypto currency itself but has also spilled over into related stocks and assets. Crypto-related stocks such as Coinbase (COIN), Robinhood (HOOD) and MicroStrategy (MSTR) have witnessed significant gains, reflecting the renewed interest and enthusiasm among investors in the broader cryptocurrency ecosystem. MicroStrategy, in particular, made headlines with its recent purchase of an additional 3,000 BTC, bringing its total holdings to 193,000 BTC.

Market data provided by Santiment highlights the growing bullish sentiment among traders, with Bitcoin's total open interest surging to levels last seen in July 2022. The increasing number of whale transactions, along with a rise in the funding rate and Relative Strength Index (RSI), indicates a strong conviction among traders betting on further price appreciation for Bitcoin.

Uncharted Territory

However, amidst the euphoria surrounding Bitcoin's rally, some analysts caution that certain catalysts driving crypto prices may already be priced in. JPMorgan Chase, in its analysis, suggests that the Bitcoin halving event and the next major Ethereum network upgrade might be largely factored into current prices. Nonetheless, the prospect of spot Ethereum ETF approvals by the SEC in May presents a potential catalyst that could further fuel the crypto currency market's momentum.

As Bitcoin approaches the three-month mark for Bitcoin ETF approvals and gears up for the impending halving event, the crypto currency market is experiencing a resurgence in bullish sentiment. With Bitcoin prices rallying higher and traders betting on further upside potential, the stage is set for an exciting period ahead in the world of crypto currencies. However, amidst the optimism, it's essential for investors to tread cautiously and be mindful of the inherent volatility and risks associated with the crypto market.

We’re currently entering new territory unseen in previous cycles which is mainly attributed to mainstream adoption and a complete shift in market dynamics, we can only guess that more money will continue to flow into the Decentralised Finance (De-Fi) sector leading to new highs and probably new high losses too.

Image sources provided supplemented by Canva Pro Subscription. This is not financial advice and readers are advised to undertake their own research or seek professional financial services.

Posted Using InLeo Alpha