Bitcoin (BTC) price is up today, rising to an intra-day high of $35,280 and a new 17-month high before retracing slightly. The Bitcoin price increase today comes as hype around a spot BTC exchange-traded fund (ETF) crescendoed with the listing of BlackRock’s iBTC on the Depository Trust & Clearing Corporation (DTCC) website. While the listing seems to have been removed, Bitcoin’s bullish momentum continued as it is conventionally seen as a major step before an ETF is officially approved.
Although Bitcoin price has retraced from the $35,000 level, the reasons for this week’s price move could be a hint at the rally’s sustainability.
Let’s look into the reasons why Bitcoin price is up today.
Institutional interest in Bitcoin boosts market sentiment
Despite a bevy of macro headwinds, the listing of BlackRock’s spot Bitcoin ETF on a Nasdaq trade clearing firm appears to have been the primary catalyst behind Bitcoin’s rally to $35,280 for the first time in over a year.
Despite a rush of spot Bitcoin ETF amendments in mid-October, the BlackRock iBTC fund is the first to be listed by the clearing firm.
To date, the SEC has refused to approve a spot Bitcoin ETF despite numerous applicants including BlackRock, Fidelity, ARK Invest and 21Shares which has filed for approval three times. On Oct. 14, Grayscale scored a major victory after the SEC announced that it would not appeal the U.S. Court of Appeals Circuit Judge Neomi Rao’s decision. The decision led Grayscale to file a new spot Bitcoin ETF application on Oct. 19
Related: The Truth Behind Cuba’s Bitcoin Revolution: An on-the-ground report
What does a spot ETF mean for BTC?
Analysts continue to speculate what a spot Bitcoin ETF approval could do for BTC price. According to reports, an approval may generate $600 billion in new demand. CryptoQuant believes an ETF approval will lead to a $1 trillion increase in Bitcoin’s market capitalization.
On Oct. 24, Galaxy Digital released a report showing that when Bitcoin ETFs are approved, BTC could see a minimum of $14.4 billion of inflows in the first year, growing to $38.6 billion by year three.
Charles Edwards, the founder of Capriole Investments, also suggested that gold sprung out of a bear market to generate a 350% return after a Gold ETF was approved.
Related: Bitcoin bulls fight to hold $34K as CME BTC open interest surpasses 100K
Bitcoin liquidations and open CME interest skyrocket
Coinciding with Bitcoin’s price gains, exchanges continue to see an exodus of BTC. The market perceives coins leaving crypto exchanges as a bullish signal, given traders withdraw their BTC typically when they want to hold it in self-custody long-term.
With Bitcoin continuing to leave exchanges, liquidations tend to have a strong impact on price. In the past 24-hours alone, over $181.3 million BTC shorts have been liquidated with over $4.5 million in shorts being liquidated in a 1-hour timeframe.
Glassnode described the recent high number of liquidations as a “double short-squeeze.”
The rally was in part driven by a significant ‘double short-squeeze’, with $54M liquidated on 17-Oct, and then another $125M on the rally to $35k.
These are of a similar scale to the $BTC leverage wipe-outs in January (a short-squeeze) and August (a long-squeeze). pic.twitter.com/NjLTnR01RF
— glassnode (@glassnode) October 24, 2023
On the heels of the “double short-squeeze,” Bitcoin futures open interest reached 100,000 BTC on the Chicago Mercantile Exchange (CME) for the second time in history. The last time CME Bitcoin open interest reached 100,000 BTC was Nov. 22, 2022.
Bitcoin’s strong is helping boost market sentiment. The Bitcoin Fear & Greed Index shows the market has shifted from fearful to greedy, gaining 22-points in a month.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
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