Bitcoin (BTC): Will $50K Have a Chance
Bitcoin (BTC) once again showed it can thrive on crisis. Just weeks after China banned the crypto asset, BTC recovered the $48,000 range, and continued above $49,000.
Following the hours-long outage of Facebook on October 4, BTC extended its rally, standing briefly above $49,500. Now, the asset is setting the question of revisiting levels above $50,000. The latest BTC price hike also revealed a decoupling against stock indexes, where BTC responded as a safe-haven asset.
On Tuesday, BTC held at $49,239.23, up more than 3% overnight on trading volumes of around $33B in the past 24 hours. BTC now steps into the last stretch of 2021, with significant predictions of a rally in October.
After regaining the $45K level, trader expectations see BTC remaining bullish only after crossing $50,000 again.
The latest price predictions envision BTC climbing to a new all-time high in the fall, with a probable range above $70,000. The latest rally for BTC happened despite Tether (USDT) retiring more than 400M coins. The supply of USDT is now slightly above 68B tokens spread across nine networks, and the chief source of liquidity for BTC.
BTC Trading Returns to Greed
After a series of liquidations, BTC trading has once again turned to an indication of greed. The Crypto Fear and Greed Index was lifted to 59 points, still far from more extreme trading expectations.
Liquidations have abated in the past 24 hours, reaching the equivalent of only 3.5 BTC, based on Bybit data. BTC is yet to rebuild its leverage, and the coming quarter will also see a withdrawal of traders after accounts from mainland China will be limited on Binance, OKEx and other exchanges.
Retail Continues Stacking
There are now even more signs of retail demand for BTC. While big-scale wallets and collateral addresses build up a significant stash of coins, retail buying is also near an all-time high.
Glassnode data shows growth in small-scale wallets owning above 0.1 BTC.
Those wallets are potentially willing to hold onto the coins in the long term, further increasing exchange scarcity for spot buying.
BTC spot reserves are inching down, with under 3M coins remaining with most big market operators. At the same time, spot buying is also showing a growing ETH popularity. Owning actual ETH and not ETH futures opens up access to multiple protocols, NFT markets and staking opportunities.
BTC exchange reserves started dropping in September, from around 2.5M coins to the current level of 2.37M coins. While there is some strategic spot selling, most buyers hold onto their assets and protect the coins in self-custody.
Lightning Network, Mining, Show Bullish Signs
BTC keeps up a robust record of success in terms of mining operations. In the past weeks, most miners are showing a trend of holding onto their coins. At the current level, BTC hashrate is on track to recover its all-time high and adapt to the limited opportunities for mining in some regions of China.
The BTC lightning network is also becoming a more important tool to send and receive coins. The LN collection of nodes and channels now locks in more than 3,000 BTC.
The network keeps adding new nodes and channels, making micropayments a possibility. More than 27,300 nodes are now active, with more added each day.
ETF Permission Brings New BTC Hype
Over the past years, most attempts to build a BTC-based exchange-traded fund (ETF) for the US market have failed. The US Securities and Exchange Commission even limited the use of “blockchain” in its permitted ETFs, to avoid hype and volatility.
Now, another decision period is running for a Bitcoin ETF, which may boost prices over the coming weeks. A BTC-based ETF would lock in more coins, while increasing retail investment. The newest review period remains hopeful, after SEC chairman Gary Gensler spoke in favor of BTC-derived products. Gensler mentioned that those products would enjoy significant investor protection.
The potential launch of a BTC-based ETF was also greeted by Grayscale, one of the biggest providers of crypto-derived funds for retail traders.
The Grayscale Bitcoin trust is now lagging the spot market for BTC, as well as the more speculative derivative markets. GBTC shares trade at an equivalent price of around $45,000 per BTC.
At the same time, ETH interest is showing to be more robust, with Grayscale’s shares trading at a slight premium to ETH market prices.
While an ETF permission is creating favorable expectations, it is possible that the SEC will still choose to be more conservative. In the past, most attempts at ETF creation have failed at the last moment.
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How do cryptocurrencies stack up against popular stocks and shares?
In Part 1 of the guide we look at the stochastic oscillator, relative strength index and moving averages
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