Overview of the Market: The cryptocurrency market experienced a surge on Monday, led by Bitcoin, outperforming traditional stocks. This momentum is driven by the increasing anticipation of regulatory approval for Bitcoin exchange-traded funds (ETFs). The current technical indicators also indicate a promising outlook for the cryptocurrency giant.
Performance of Bitcoin: In the past 24 hours, the price of Bitcoin has risen by 2%, surpassing the $30,450 mark and even reaching close to $31,000 at one point. This follows a period of sideways movement around the $26,000 level. However, the past ten days have seen a significant rally, pushing Bitcoin to levels not seen since mid-July.
Alex Kuptsikevich, a seasoned analyst at FxPro, commented on the recent trend, stating, “The past week has been excellent for Bitcoin, with a 10% growth. If we can maintain stability above $31,000, we may witness a rapid rise to the $40,000 range.”
Traditional Markets vs. Cryptocurrency: While indices like the Dow Jones Industrial Average and the S&P 500 face challenges due to rising government bond yields, cryptocurrencies remain strong. Typically, higher yields on U.S. Treasuries can dampen investor appetite for riskier assets. However, Bitcoin has defied this logic, driven primarily by optimism surrounding the potential approval of a Bitcoin ETF by the Securities and Exchange Commission (SEC).
The buzz around a Bitcoin ETF has been growing, especially after key financial players like BlackRock have shown interest. The recent legal victory for crypto asset manager Grayscale regarding the conversion of its Bitcoin trust into an ETF further fuels this anticipation. Such an ETF would directly hold Bitcoin, distinguishing it from funds that hold Bitcoin futures. This could attract a new wave of retail and institutional investors, boosting cryptocurrency prices.
However, while the technical outlook appears favorable, the actual launch of an ETF might still be several months away. Additionally, the ongoing decline in stocks may impact the cryptocurrency market. Kuptsikevich added, “A strong risk-averse sentiment could lead to institutional selling in the crypto space.”
Other Cryptocurrencies: Ether, the second-largest cryptocurrency, also saw a 2% increase, reaching $1,670. Altcoins like Cardano and Polygon experienced gains of 2% and 8% respectively. Popular memecoins, Dogecoin and Shiba Inu, also recorded gains of 4% and 2% respectively.