Why Bitcoin Soared to 21-Month Highs ?

Bitcoin has kicked off 2024 on a high note, surging by about 9% to reach $45,925, marking its highest value since April 2022. This surge is attributed to a combination of factors involving its on-chain activity, fundamental indicators, and technical analysis.

The current price uptick comes just ahead of the U.S. Securities and Exchange Commission’s (SEC) deliberation on several spot Bitcoin ETF applications, expected before the official approval window opens on January 4.

Notably, data from CME Bitcoin futures highlights investors’ optimism regarding higher BTC prices. These futures are currently trading at an approximate premium of $1,300 above the cryptocurrency’s spot value, signaling a belief among futures traders in a potential rise in Bitcoin’s value following the anticipated approval of a Bitcoin ETF.

This scenario, known as “contango,” implies that futures traders are anticipating increased demand for BTC, likely influenced by the expected ETF approval. Traders are speculating that the spot price will eventually match or surpass the futures price in the coming days or weeks.

Furthermore, there’s a noticeable trend in Bitcoin’s net flows, indicating negative net flows today. In the realm of spot exchanges, a decrease in net flow typically suggests growing buying pressure, suggesting traders are withdrawing funds from exchanges for longer-term holding.

This trend aligns with a broader pattern observed since June, coinciding with BlackRock’s filing for a spot Bitcoin ETF, showcasing diminishing balances across various crypto exchanges. This trend hints at traders’ expectations of higher prices in anticipation of the SEC’s ETF decision and possibly the 2024 Bitcoin halving.

Today’s price surge in Bitcoin is part of an ascending triangle pattern, a setup in an upward market trend. Typically, these triangles conclude with a decisive price breakout above their upper trendlines, potentially propelling the price to reach heights equal to the triangle’s maximum.

As of January 2, Bitcoin’s price had entered the breakout stage of this ascending triangle pattern, setting its sights on the primary breakout target just under the $50,000 mark.


Disclaimer: Not Investment Advice

it’s crucial to understand that the information provided here is not to be construed as investment advice. The crypto market is dynamic and highly speculative, and decisions should be made based on thorough personal research and consideration of individual risk tolerance. Always consult with financial professionals and conduct your own due diligence before making any investment decisions. The intention of this exploration is to present insights and trends, not to provide specific investment recommendations.

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