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Bitcoin ETF Frenzy: Price Surge and Speculation

Martin Walker
Oct 24, 2023 at 12:19 pm

Bitcoin (BTC) experienced a significant dip, with its ticker falling to $34,566 on October 24, creating a moment of suspense in the cryptocurrency market. This decline was followed by a remarkable ascent to 17-month highs, driven by the growing buzz surrounding the potential launch of a Bitcoin exchange-traded fund (ETF). 

BTC/USD 1-day chart. Source: TradingViewBTC/USD 1-day chart. Source: TradingView 

Data related to the Bitcoin ETF listing suggests that it's Bitcoin's moment to shine

This BTC ETF data listing tantalizingly hinted at a possible "time to shine" for the world's most famous digital currency. According to data gleaned from TradingView, the BTC/USD pair managed to achieve an impressive $35,198 on Bitstamp before gracefully easing into a consolidation phase, leaving market participants eager for what would come next.

This upward journey represented a notable 17% gain since the close of the previous week, taking Bitcoin to its highest price point since May 2022. Even though the price had retraced slightly below the $34,000 mark at the time of this composition, the overall sentiment within the crypto community was decidedly upbeat. This enthusiasm was amplified by ongoing discussions concerning the much-anticipated launch of a Bitcoin spot price ETF in the United States.

The launch of such an ETF had been a long-cherished dream, thwarted for years by the watchful eye of U.S. regulators. Nevertheless, optimism prevailed after signs of progress emerged when data for the iShares Spot Bitcoin ETF surfaced on the website of the Depository Trust & Clearing Corporation (DTCC), which plays a pivotal role in clearing Nasdaq trades. While the official green light was still pending, the prevailing sentiment in the industry was increasingly leaning toward the belief that approval was imminent.

Consequently, public Bitcoin ETFs across the globe witnessed a notable influx of funds, equivalent to an impressive 10% of the year-to-date total within a single, exhilarating 24-hour period, as confirmed by Bloomberg. The Kobeissi Letter, a venerable financial commentary resource, opined that "An SEC approval of the ETF would likely mean that many other Bitcoin ETF approvals are coming." They also highlighted that BTC/USD had already accrued a staggering 107% year-to-date, leading to a substantial $300 billion boost in its overall market capitalization.

The report went further to emphasize that, amidst the backdrop of escalating geopolitical tensions, Bitcoin was now being hailed as a safe haven asset, which naturally raised the poignant question: "Is Bitcoin finally getting its time to shine?"

The price of BTC touches the final upward gap in CME futures

While assessing the future trajectory of BTC's price, a discernible chasm in viewpoints emerged between seasoned traders and the prevailing market trend. Despite the euphoria of reaching these new heights, numerous prominent figures on social media retained an air of cautious skepticism, with some even daring to express overtly bearish sentiments.

One influential trading account, Ninja, doled out a sobering reminder that there were no remaining CME Group Bitcoin futures gaps above the current spot price, with the only gaps now residing below it. Meanwhile, the symbolic level of $20,000 continued to serve as a magnetic pull for traders, acting as both a crucial psychological support and coinciding with a lingering CME gap.

CME Bitcoin futures chart with gap highlighted. Source: TradingViewCME Bitcoin futures chart with gap highlighted. Source: TradingView 

On the flip side, a select few market participants chose to capitalize on these gains, among them astute analysts and Maartunn, a contributor to the on-chain analytics platform CryptoQuant. Maartunn shared insights into the recent price surge, attributing it to the urgency of investors compelled to enter the market. In response, he contemplated shedding some of his holdings to secure profits.

Trader Skew meticulously observed changes in the order book as BTC's price ascended, noticing market makers (MMs) actively offloading their positions to eager buyers. At the same time, Crypto Chase, another discerning trader and analyst, foresaw a potential "sell the news" scenario if Bitcoin ventured into the mid-$30,000 range after the ETF approval.

Intriguingly, Filbfilb, a co-founder of the trading suite DecenTrader, cast doubt on the idea that these recent gains exhibited a unique character compared to prior upward movements in 2023. He ventured a prediction, shared in accompanying comments, that Bitcoin could experience a substantial decline in the first quarter of 2024, drawing on insights from the timing of previous price cycles.

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