Bitcoin's Price Battle
The price of Bitcoin (BTC) is currently fighting to hold the $34,000 level after experiencing a strong rally and short squeeze that pushed its price above $35,000 on October 23rd.
According to Charles Edwards, the founder of Capriole Investments, Bitcoin's upward movement has broken through the $32,000 resistance after 7 months of consolidation. He believes that the upcoming monthly resistance is unlikely to be a challenge and expects either a rapid continuation to the mid-range of $43,000 or a short-term consolidation between support and resistance at $32,000 - $35,000 before further gains.
Potential Catalysts for the Rally
The recent excitement surrounding the potential approval of a spot Bitcoin ETF by the SEC is seen as one of the catalysts for the current price rally. Edwards also points to several other near-term factors contributing to the surge in Bitcoin's price.
Paul Sztorc, the founder of LayerTwo Labs, agrees with Edwards and believes that Bitcoin is decoupling from equities, which has surprised many market participants. He also suggests that expectations of foreign conflicts and rising macroeconomic uncertainty had led traders to anticipate a dip in Bitcoin's price, which did not materialize. Sztorc draws a parallel to a similar divergence in the market during the U.S. regional banking crisis, where Bitcoin outperformed other assets.
Sztorc further explains that traders and investors are now accumulating Bitcoin ahead of the potential approval of a spot Bitcoin ETF. He also mentions expectations of the Federal Reserve easing monetary policy due to rapidly rising yields, which could result in monetary debasement.
Institutional Interest in Bitcoin
The increasing open interest in Bitcoin futures on the Chicago Mercantile Exchange (CME) is seen as further evidence of institutional investors warming up to Bitcoin. The CME's BTC open interest has surpassed 100,000 BTC, indicating that institutional investors are accumulating spot Bitcoin and hedging their positions through futures contracts.
While offshore perp open interest decreased by 26,735 BTC, the CME's open interest grew by 4,380 BTC, reaching a record high.
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