Bitcoin BTC -0.53% has recently hit a milestone crossing the $45,400 mark. Over the 12 hours there have been liquidations worth, over $100 million on the network mainly affecting positions. While Bitcoin has experienced a bit of a lull in days staying close to the M200 moving line it suddenly surged by $2,000 in just a few hours and entered an overbought state once again.
This is the time since December last year that it has reached such high levels of overbought conditions. 10 hours ago when Bitcoin was hovering around $42,500, there was liquidation activity happening at that price point. At the $43,200 level specifically there were liquidation orders placed by exchanges professional trading firms or hedge funds who saw it as an attractive opportunity due to their usual success rates. The considerable leverage offered in the futures market definitely caught their attention as a way to profit.
Once the market price reaches that range we could witness a number of orders executed quickly which might lead to rapid price movements. This becomes more apparent in a market with liquidity where we may see whats known as a cascade effect of liquidations occurring. One triggering another and pushing prices significantly away, from their current levels.It’s not uncommon, in high stakes markets. Its not a guaranteed occurrence.
However there was a sell off yesterday at $42,700. Bitcoin didn’t continue to rise. Looking at the Bitcoin liquidation heat maps there doesn’t seem to be any sell off activity after the price broke through the important level of $43,200. When we consider Bitcoins URPD (Unspent Realized Price Distribution) indicator it appears to be delayed. Recently there was an amount of buying at the $41,800 level and substantial buy orders at $43,200. On the chart on the right hand side there isn’t any resistance which suggests that Bitcoin isn’t persistently sluggish but has chosen to go up. For those who have been holding Bitcoin for than two years but than three years now have an average holding cost of $48,000 as a significant barrier level.
There are two updates regarding spot ETFs. First of all according to sources at Blackrock it is possible that the SEC might approve a spot ETF over this weekend. Reports suggest that based on conversations with the SEC officials they still need some time to review all changes submitted week and provide their comments on them. If the SEC follows its decision from October we can expect approval, for the Bitcoin spot ETF in weeks.
This represents a development, for the subject at hand as the approval of an ETF focused on Bitcoin could bring stability and liquidity to the market. Such a development would likely lead to increased Bitcoin prices. Create opportunities for long term investors. Therefore if you have an interest in entering the cryptocurrency space now might be a time.
A similar timeline seems to be emerging for Ethereum ETH 3.95% futures as the SEC is expected to engage with issuers to establish approval timelines after completing their reviews. However given that SEC staff have been on holiday since Friday it may be challenging for approval to come by Tuesday or Wednesday. Sources suggest that the spot ETFs approval will likely occur over this weekend.
Furthermore there are indications from Galaxys CEO that something significant’s on the horizon. Specifically referring to the spot ETF. It should be noted that there has been news surrounding spot ETFs in the market including discussions about cash redemption models and agreements between applicants and banks; however these developments did not significantly impact Bitcoins price. Nevertheless as we enter into the year it is evident that there is a trend in the market which may hold some significance.
On New Years Day itself Bitcoin reached a point in its recent performance. Marking a positive start, for this year. Additionally Ethereums price rebounded from its M200 moving level. Entered into overbought territory.Even though Bitcoin hasn’t reached its point this year the overall cryptocurrency market is still, on the rise, which’s definitely something to be happy about. People are eagerly awaiting news this week possibly regarding the approval of the spot ETF.
We might hear about it in the coming days. In terms of options trading it’s mainly institutions than individual investors who are active participants. The popular options now are for March or June 2024 indicating that fund investors are more focused on long term growth rather than being concerned about a spot ETF approval or disapproval. Most of these investors seem to be buying call options.
Although recent weeks have seemed calm it’s worth noting that the fourth quarter of 2023 performed well for Bitcoin. Its price increased by around 57% aligning with trends in the market. The fourth quarter has traditionally been a period for Bitcoin followed by a first quarter as well. Therefore there is hope for a trend, over the next two to three months. Despite some declines recently long term holders of Bitcoin continue to accumulate supply overall.
This suggests that individuals who have held onto Bitcoin for a period of six months or more exhibit a level of assurance in the growth of Bitcoin.