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Bitcoin‘s (BTC) price recovered $30,000 on October 20, erasing the losses caused by the significant sell-offs following Cointelegraph’s erroneous report on Monday. On-chain analysis summarizes the factors that could push BTC towards the $40,000 milestone.
ETF Wind in Cryptocurrencies!
Cryptocurrency markets responded to many bullish macro events, including Grayscale’s new application for a spot Bitcoin ETF to the U.S. Securities and Exchange Commission, and the price of Bitcoin reached $30,000 on Friday. Will the rising investors resist to reclaim $40,000? The price of Bitcoin surpassed $30,000 on Friday, doubling its weekly gains to double digits. However, critical indicators may indicate that BTC prices are likely to rise further in the coming days.
Bitcoin dominance (BTC.D) has been increasing consecutively for 10 days since October 10. This situation could be quite unusual because historically, when BTC achieves significant gains and surpasses a milestone price level, investors may shift their funds to altcoins to diversify and grow.
However, the macroeconomic landscape and events surrounding the Middle East crisis may make investors reluctant to turn to altcoins this time. This recent trend in BTC.D may confirm the thesis that Bitcoin’s “safe haven” status could further accelerate the ongoing price rise.
According to the charts, when the crisis broke out on October 7, Bitcoin’s cryptocurrency market share was at 51%. After two weeks of increasing tensions, Bitcoin gained more ground, and BTC.D rose to 52.71% on October 20. Bitcoin dominance (BTC.D) can capture the percentage of the total cryptocurrency market valuation that Bitcoin currently holds. In bearish macro conditions, when the Bitcoin market rises, this situation may signal that investors exhibit lower risk appetite and turn to BTC as a safe haven.
Expectation of Price Increase in BTC
A similar situation was observed after the outbreak of the Russia-Ukraine war on February 24, 2022. Bitcoin’s dominance in the cryptocurrency market jumped from 44% to 48% within two weeks. After the initial price drop caused by the war FUD, the price of Bitcoin increased by 51% from $20,200 to $30,400 between March 10 and April 10, 2022, as cryptocurrency investors flocked to Bitcoin’s safe haven status.
The current Bitcoin price rise and the conditions surrounding BTC.D trends indicate similarities to events following the Russia-Ukraine war. If history repeats itself, a 50% increase could propel Bitcoin’s price well above $40,000 in the coming weeks.
