Explore the dynamics behind Bitcoin’s bullish run and the growing anticipation surrounding a US-based Bitcoin ETF. A deep dive into market trends and forecasts.
Over the past few days, Bitcoin (BTC) has shown significant resilience and growth, indicating a notable trend in the cryptocurrency market.
Amid a surge in trading volume, BTC price hit a fresh 52-week high of $37,926 on November 9. However, amid the volatility, the price has bounced back and is trading at $37,100 as of November 10.
This recent rise is partly attributed to a “short squeeze” – a market phenomenon where the price of an asset jumps higher than expected, forcing short sellers to cover their positions, driving the price further upwards.
The ripple effects of Bitcoin’s boom have also been felt in the US stock market, particularly among crypto-centric companies.
Shares of prominent firms such as Coinbase and MicroStrategy showed notable gains, with Coinbase rising about 4% and MicroStrategy, which owns more than 150,000 BTC, rising nearly 5%.
Similarly, mining companies Marathon and Riot have also made significant gains. This trend reflects growing optimism in the market, especially with the potential approval of a spot Bitcoin ETF in the US
Let’s dig deeper into these recent developments and try to gauge where BTC is headed in the long term.
Factors Underlying BTC Bull Market
Bitcoin’s impressive surge, which boasts a 123% year-to-date (YTD) gain, provides a remarkable contrast to turbulent macroeconomic conditions and geopolitical tensions.
This performance has led to heightened market sentiment, with traders increasingly optimistic about Bitcoin’s price trajectory.
The options market data reveals that traders are positioning themselves for Bitcoin to reach the $40,000 level. This kind of bullish positioning in the options market often reflects broader investor sentiment and can have a self-reinforcing effect on the market.
Meanwhile, the Fear and Greed Index reached a score of 77, a level comparable to that seen when Bitcoin peaked in November 2021, indicating a significant shift in investor sentiment.
Adding fuel to the fire, the potential approval of Bitcoin spot ETFs, including those from major players such as BlackRock, Fidelity, ARK Invest and 21 Shares, likely fueled investor optimism.
While the SEC has yet to approve a spot Bitcoin ETF, the open period for approval runs until January 10, 2023, maintaining a level of anticipation in the market.
Analysis of Bitcoin on-chain metrics
Bitcoin’s on-chain data provides valuable insights into the network’s health, usage patterns, and potential future price movements. Let’s dig into these metrics:
Daily transactions on the BTC network
This metric represents the total number of transactions processed on the Bitcoin network within a 24-hour period. This is a direct indication of the network’s usage and activity level.
The significant increase from 283,000 transactions on October 9 to 553,000 on November 10 indicates an increased level of activity and engagement within the Bitcoin network. This boom can be associated with increased investor interest, higher trading volumes and possibly a growing adoption of Bitcoin for various use cases.
Typically, a higher number of daily transactions is viewed positively as it suggests robust network health and can be a bullish signal for Bitcoin’s price.
Number of new addresses
This metric tracks the number of new Bitcoin addresses created each day. New addresses may indicate new users entering the network or existing users generating new addresses for transactions.
The rise from 406,000 new addresses on October 9 to 568,000 on November 10 reflects growing participation in the Bitcoin network.
An increase in new addresses is a precursor to greater demand for Bitcoin, which in turn can increase its price. However, it is important to note that not all new addresses represent new users, as a single user can generate multiple addresses.
Bitcoin hash rate
The hash rate measures the total computing power used to mine and process transactions on the Bitcoin network. This is an important security measure that indicates how much computing power is required to hack or manipulate the network.
The jump in hash rate from 256 EH/s on January 1 to 452.01 EH/s as of November 10 is a strong indication of network security and miner confidence.
A higher hash rate implies that more miners are active and investing resources, indicating that they believe in Bitcoin’s profitability and stability.
In general, a rising hash rate is considered bullish for Bitcoin’s price, as it indicates a secure and robust network that is attractive to both investors and users.
Bitcoin (BTC) price prediction
Reports suggest that an approval of a spot Bitcoin ETF could generate significant new demand, potentially leading to a $1 trillion increase in Bitcoin’s market cap.
Galaxy Digital, a prominent name in the crypto space, predicts a 74% price increase in Bitcoin in the first year after a mock BTC ETF launch. They used $26,920 as the base price, which suggests that more than half of the rally has already been exhausted.
This expectation is based on the premise that an ETF will make Bitcoin accessible to a wider variety of investors, especially those in traditional finance who are more comfortable with regulated investment vehicles.
Meanwhile, algorithmic models and Bitcoin forecasting websites predict optimistic growth for Bitcoin in the coming years.
According to these Bitcoin price predictions, BTC is expected to reach around $74,195 in 2023 and further rise to around $90,361 in 2024.
While these BTC predictions offer an encouraging outlook, investors are advised to be cautious and not invest more than they can afford to lose.
Cryptocurrency markets, especially Bitcoin, are known for their volatility, and predictions should not be the only basis for investment decisions.
Disclosure: This article does not represent investment advice. The content and materials on this page are for educational purposes only.
Disclaimer for Uncirculars, with a Touch of Personality:
While we love diving into the exciting world of crypto here at Uncirculars, remember that this post, and all our content, is purely for your information and exploration. Think of it as your crypto compass, pointing you in the right direction to do your own research and make informed decisions.
No legal, tax, investment, or financial advice should be inferred from these pixels. We’re not fortune tellers or stockbrokers, just passionate crypto enthusiasts sharing our knowledge.
And just like that rollercoaster ride in your favorite DeFi protocol, past performance isn’t a guarantee of future thrills. The value of crypto assets can be as unpredictable as a moon landing, so buckle up and do your due diligence before taking the plunge.
Ultimately, any crypto adventure you embark on is yours alone. We’re just happy to be your crypto companion, cheering you on from the sidelines (and maybe sharing some snacks along the way). So research, explore, and remember, with a little knowledge and a lot of curiosity, you can navigate the crypto cosmos like a pro!
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