Bitcoin price has seen a significant increase, reaching up to $38,012 on the Binance cryptocurrency exchange. As a result, the market is now focusing on the fundamental reasons behind this surge. The question of whether the rally will continue or not remains a subject of curiosity. The levels of $45,000 and $50,000 are already being talked about for the end of 2023. Let’s take a look at the five reasons behind the Bitcoin rally.
There is excitement in the cryptocurrency market about the potential approval of a Bitcoin ETF. The resistance from the SEC continues. Experts such as James Seyffart and Eric Balchunas from Bloomberg point out that the chances of Bitcoin ETF applications being approved are high. The approval window, which opened on November 9th, will remain open until Friday, November 17th. Therefore, a decision regarding the applications is expected for Friday. On the other hand, there is also an application by ARK Invest. In this context, it is stated that there is a 90% chance of multiple applications being approved by January 10, 2024.
SEC faces significant challenges regarding the Bitcoin ETF. The applications by Franklin Templeton and Hashdex will be concluded by November 17th, and GlobalX’s application will be concluded by November 21st. Clearly, a tense atmosphere is noticeable. However, regardless of how much the process is delayed, the cryptocurrency world has already benefited from this hesitation.
Investments by institutions in Bitcoin have attracted attention. As we mentioned earlier this week, institutional demand for Bitcoin, particularly through exchange-traded products (ETPs), has reached new highs. The recent BlackRock Bitcoin spot ETF application has significantly contributed to this increase.
According to K33 research, assets managed through ETPs have increased by 27,095 BTC. This brings the total to 204,170 BTC. The dollar value of this figure is equivalent to $7.4 billion.
Data from LookIntoBitcoin highlights an interesting trend in the Bitcoin rally. More than 70% of Bitcoin has not been moved for at least a year. This development is also considered a historic moment.
The continuation of HODL behavior is a sign that long-term investors are not selling their BTC. This situation is also interpreted as a sign of an upward trend in the market. Additionally, there is a Bitcoin halving event ahead of us.
Arthur Hayes, co-founder of BitMEX, made comments about the liquidity injected into the market by the Fed and its impact on cryptocurrencies.
Hayes emphasized the $200 billion liquidity injected into the market and highlighted its potential rally effect on cryptocurrencies.
Lastly, the inverse correlation between Bitcoin and the US Dollar Index (DXY) was seen as a significant reason behind the rally. DXY faced resistance and started to decline, followed by significant increases in Bitcoin.
Crypto analyst Josh pointed out that as DXY falls, Bitcoin jumps. At the time of writing, Bitcoin is trading at $37,377.