Bitcoin (BTC) has recently reached a milestone, surpassing $46,000 for the first time since its spot ETFs debut trade on January 11. This is a significant development for the cryptocurrency, which has faced a challenging start to 2024. However, the recent surge in Bitcoin’s price suggests that things are turning around for the digital asset. In this article, we will explore the factors contributing to Bitcoin’s upward trend and assess its future prospects.
Despite initial setbacks, Bitcoin has gained strength through the approval of several exchange-traded funds (ETFs). These ETFs were introduced to enhance Bitcoin’s institutional legitimacy, attracting more investors to the market. Laurent Ksiss, a specialist in crypto Exchange-Traded Products (ETPs) at CEC Capital, believes that Bitcoin’s current upward trend could bring early investors in the BTC ETF close to profitability. However, Ksiss also warns that this momentum might lead to some investors taking profits, potentially triggering a reversal and testing the $42,000 to $40,000 level.
The decline in Bitcoin’s price in the early part of 2024 can be attributed to Grayscale’s actions. When Grayscale converted the Bitcoin Fund ETF to an open-ended fund, investors who had previously held their shares for six months were now allowed to cash out. As a result, many investors rushed to redeem their shares, causing Grayscale to sell significant amounts of Bitcoin. This sell-off led to a drop in Bitcoin’s price, reaching a low of below $39,000. However, it seems that the sell-off has come to an end, and Bitcoin is once again seeing a rise in its value.
Markus Thielen, head of research at Matrixport and founder of 10x Research, predicts that Bitcoin is heading towards $48,000 in the near future. Thielen’s research suggests that Bitcoin often experiences significant gains during the Chinese New Year festival. Historical data shows that each time traders acquired Bitcoin three days before the start of the Chinese New Year and sold it 10 days later, the price of Bitcoin increased over the last nine years. This statistical trend indicates that the following days after the festival are crucial for Bitcoin’s performance.
LMAX Digital, a leading institutional cryptocurrency exchange, anticipates Bitcoin to continue rising and potentially reach the $50,000 mark. Using Elliott Wave theory, which analyzes repeating wave patterns in price movements, Thielen projects greater upside for Bitcoin in the future. According to Thielen, Bitcoin has entered its final impulsive stage of the rally, targeting $52,000 by mid-March.
Bitcoin’s recent surge above $46,000 signifies a positive turn for the cryptocurrency. The approval of ETFs has strengthened Bitcoin’s institutional legitimacy and attracted more investors to the market. Despite the setbacks caused by Grayscale’s sell-off, Bitcoin has recovered well and is on an upward trend once again. Additionally, the Chinese New Year effect and predictions based on technical analysis indicate further potential gains for Bitcoin in the near future. As with any investment, it is important to conduct thorough research and consider the risks involved before making any decisions.
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