Rally

Bitcoin ETF

Bitcoin

The Bitcoin price rally is losing strength as the cryptocurrency returns to its support levels following weeks of bullish momentum. In the short term, the landscape seems sloped to the downside, but an analyst presented the main reasons why the rally has just begun. 
As of this writing, Bitcoin (BTC) trades at $36,550 with a 2% loss in the last 24 hours. Over the previous week, the cryptocurrency recorded similar losses following the general sentiment in the market. Only Solana (SOL) preserved its gains during the same period. 
<img loading="lazy" decoding="async" class="wp-image-561239 size-large" src="https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-BTC-BTCUSDT.png?w=860&amp;resize=860%2C410" alt="Bitcoin BTC BTCUSDT" width="860" height="410" srcset="https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-BTC-BTCUSDT.png?w=1758 1758w, https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-BTC-BTCUSDT.png?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-BTC-BTCUSDT.png?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-BTC-BTCUSDT.png?w=860&amp;resize=860%2C410 860w, https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-BTC-BTCUSDT.png?w=1536 1536w, https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-BTC-BTCUSDT.png?w=750 750w, https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-BTC-BTCUSDT.png?w=1140 1140w" sizes="(max-width: 860px) 100vw, 860px" data-recalc-dims="1"> 
<h2 id="strong-behind-bitcoin-s-surge-decoding-the-four-key-factors-strong">Behind Bitcoin’s Surge: Decoding the Four Key Factors</h2> 
According to a <a href="https://insights.deribit.com/industry/unveiling-the-four-driving-forces-behind-the-bitcoin-price-surge/" target="_blank" rel="noopener nofollow">report</a> from Deribit Insight, posted by Markus Thielen, several forces are pushing Bitcoin towards new yearly highs. These forces remain intact despite the recent price action. 
Among the reasons behind the current BTC price rally, the analyst included speculations around the U.S. Securities And Exchange Commission (SEC) Bitcoin Exchange Traded Fund decision, traders’ appetite for leverage, fiat inflows through stablecoins, and increased fee generation within the Bitcoin network. 
<h2 id="strong-sec-s-decision-on-the-bitcoin-etfs-strong">SEC’s Decision On The Bitcoin ETFs</h2> 
A significant driver is the anticipation surrounding the SEC’s approval of a spot Bitcoin ETF. Despite passing the second deadline in mid-October without any announcement, the market remains watchful, with the third deadline set for mid-January 2024. The uncertainty surrounding this decision has led to fluctuations in implied volatility, influencing Bitcoin’s value. Leveraged Positions and Futures Market 
The demand for leveraged positions in Bitcoin, primarily through perpetual futures markets, indicates a strong interest in trading the BTC/USDT pair. This was evident when the funding premium reached an annualized +28% on November 13. 
In addition, the <a href="https://www.newsbtc.com/news/options-frenzy-bitcoin-rally-to-37000-sparks-explosive-open-interest-surge/" target="_blank" rel="noopener ">BTC options market saw an uptick in realized volatility</a>. The increase in the metric signals risk appetite for investors. 
The chart below shows that the metric approaches its 5-year average. However, the analyst believes that volatility should decline as the year ends, suggesting that Bitcoin will follow a sideways trajectory in the short term. 
<img loading="lazy" decoding="async" class="wp-image-561238 size-large" src="https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-price-BTC-BTCUSDT-options-crypto.jpg?w=860&amp;resize=860%2C442" alt="Bitcoin price BTC BTCUSDT options crypto" width="860" height="442" srcset="https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-price-BTC-BTCUSDT-options-crypto.jpg?w=940 940w, https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-price-BTC-BTCUSDT-options-crypto.jpg?w=460 460w, https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-price-BTC-BTCUSDT-options-crypto.jpg?w=768 768w, https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-price-BTC-BTCUSDT-options-crypto.jpg?w=860&amp;resize=860%2C442 860w, https://www.newsbtc.com/wp-content/uploads/2023/11/Bitcoin-price-BTC-BTCUSDT-options-crypto.jpg?w=750 750w" sizes="(max-width: 860px) 100vw, 860px" data-recalc-dims="1"> Influx of Fiat Via Stablecoins 
Another crucial aspect is the substantial fiat inflow into cryptocurrencies, mainly through Tether’s USDT, indicating fresh capital entering the crypto space. With over $3.8 billion moving into crypto in the last 30 days, this influx has had a notable impact, especially on altcoins, reflecting growing investor confidence. Increased Bitcoin Network Activity 
The Bitcoin network’s fee generation signals heightened activity, reaching $54 million. The report claims that this growth in network usage, partly driven by the resurgence of Ordinals and support from major exchanges, underscores the fundamental strength of the Bitcoin ecosystem. 
Despite these positive indicators, the absence of an SEC Bitcoin ETF approval and a reduction in leveraged long positions might prevent Bitcoin from soaring past the $40,000 mark. However, the ongoing solid fiat inflows and a robust, fee-generating Bitcoin network provide grounds for cautious optimism. 
Bitcoin’s journey remains captivating as it navigates regulatory decisions, market strategies, and evolving investor sentiment. 
Cover image from Unsplash, chart from Tradingview

Is $40,000 Next? Unpacking 4 Reasons Behind Bitcoin’s Emerging Rally

Table of Contents

NewsBTC

Other articles published on Nov 17, 2023

Membrane Announces First Derivatives Trade Settled on Network

Shiba Inu’s November Pump: Predicting Heights of SHIB In 2024

A NEW ERA BEGINS - ApeSwap is rebranded to ApeBond

Google CEO Sundar Pichai Backs China As AI Leader, Urges US-China Collaboration

Meta Launches Emu Video and Emu Edit AI Models For Video and Images

XRP’s Explosive Potential: Analyst Forecasts $1.35 Surge

Join our free newsletter for daily crypto updates!