Bitcoin
and other cryptocurrencies soared on Tuesday as optimism continued to build around the prospect that a spot Bitcoin exchange-traded fund will soon launch, marking a key catalyst for cryptos that should be a long-term support for prices.
The price of Bitcoin jumped more than 12% over the past 24 hours to around $34,400. It briefly topped $35,000 to trade at its highest point since May 2022. But over the past 17 months, a string of high-profile collapses ushered cryptos into a deep bear market. Bitcoin has advanced some 30% in 10 days, blowing through a trading range around $26,000 that had held for almost two months amid a period of historic calm for crypto markets.
“ETF mania finally propelled it above this year’s pivotal resistance area of $31,000 to $32,000,” said Antoni Trenchev, co-founder of crypto lender Nexo. “It seems nothing will deter this ETF enthusiasm and it’s only a matter of time before a spot Bitcoin ETF gets approved by the SEC, likely a whole stack of ETFs.”
Crypto bulls are eyeing the possible conversion of the Grayscale Bitcoin Trust to an exchange-traded fund (ETF), or the approval of spot Bitcoin ETFs that BlackRock and other financial firms have applied for. The launch of spot Bitcoin ETFs would mark a milestone for cryptos, with these funds holding the token itself instead of futures held by existing funds.
The possibility of a spot Bitcoin ETF has loomed for months. It’s expected to usher in a fresh wave of retail and institutional investor interest and pave the way for wider adoption of digital assets. But the launch of any spot Bitcoin ETF will require the approval of the Securities and Exchange Commission, which has a history of being tough on crypto. While these ETFs now look inevitable, there could still be bumps in the road.
But traders continue to look on the bright side, helping Bitcoin vastly outperform the
Dow Jones Industrial Average
and
S&P 500
in the stock market in recent days. The latest catalysts included a federal appeals court on Monday formalizing Grayscale’s legal win against the SEC, putting its application for conversion back in the regulator’s hands. In addition,
BlackRock’s
iShares Bitcoin Trust has been listed on the Depository Trust & Clearing Corporation (DTCC)—typically a precursor to, but not a promise of, an ETF starting to trade.
So where do Bitcoin prices go next?
“Bitcoin’s exuberance over the past 24 hours needs to dissipate before we can expect any further significant moves higher given its momentum indicators are looking technically overstretched from the one-hour to the one-day timeframes,” said Nexo’s Trenchev.
Other market observers are more bullish.
“The $31,000 to $46,000 range is an area of thin air with not many obstacles. The market blew it down quickly last year, and it is worth being ready to mirror the move this time around,” said Alex Kuptsikevich, an analyst at broker FxPro.
“We remain short-term bullish given positive short-term momentum,” said Katie Stockton, managing partner at technical research firm Fairlead Strategies. Bitcoin’s “decisive” breakout targets resistance just shy of $36,000 in the fourth quarter of this year, she added.
It was a sea of green beyond Bitcoin as other cryptos surged, too.
Ether,
the second-largest token, advanced 9% to $1,825. Smaller cryptos or altcoins were also buoyant, with
Cardano
climbing 7% and
Polygon
popping 6%. Memecoins also gained, with
Dogecoin
jumping 6% and
Shiba Inu
5% higher.
Write to Jack Denton at [email protected]
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