Bitcoin Price Breaks Above $38,000, These Are The Reasons

The Bitcoin price has risen above $38,000 in the last few hours, and for the first time this year closed a 4-hour candle above this crucial price level – a very bullish sign that BTC could rise further. These are reasons behind BTC’s latest price surge:

#1 Anticipation Of Spot Bitcoin ETF Approval

The recent uptick in the Bitcoin price can probably be attributed in part to developments around the potential approval of a spot Bitcoin ETF. Bloomberg ETF analyst James Seyffart stated on X, “Okay the window for potential spot Bitcoin ETF approval is looking like it’s gonna be between Jan 5 & Jan 10 2024.”

This observation follows the SEC’s announcement about publishing the Franklin/Hashdex delays today, December 1. Scott Johnsson, a lawyer at Davis Polk, agreed with Seyffart, “This puts the comment period ending at January 5. Ark/21 Shares deadline on January 10.”

Moreover, Nate Geraci of ETF Store brought further optimism with his comments yesterday, “Another meeting yesterday between Grayscale & SEC. Absolutely fascinated to see how this all plays out, especially timing of GBTC uplisting vs launch of competing spot BTC ETFs. Btw, if you’re tired of me tweeting about this, good news is I think we’re approaching the finish line.”

These developments suggest that a spot Bitcoin ETF is only a question of when, not if. They also show a growing consensus between ETF applicants and the SEC, which only wants to fine-tune all proposals before approving a batch or all 12 applicants (besides Pando Asset) at once.

#2 MicroStrategy Will Buy More BTC

Another driving force could be MicroStrategy’s unwavering commitment to Bitcoin. The company’s latest filing revealed an additional purchase of 16,130 BTC, amounting to roughly $608 million. This acquisition, at an average price of about $36,785 per Bitcoin, takes MicroStrategy’s total holdings to 174,530 BTC.

However, what was even more important was the news that MicroStrategy is already planning its next Bitcoin buys. The company has entered into an agreement to offer up to $750 million worth of class A common stock, a move interpreted by many as a preparation for further Bitcoin purchases.

This means that Saylor will buy even more BTC in the coming weeks or months, definitely making a positive impact on BTC price. The news is definitely bullish for the price, while some traders might want to front run it.

#3 Market Dynamics

The current market dynamics surrounding Bitcoin’s price surge have been closely scrutinized by leading crypto analysts, revealing nuanced insights into the behavior of market participants. Crypto analyst Skew highlighted a specific pattern in the buying behavior, indicating a strategic approach by market players.

He stated “Fairly obvious taker twap bidding on the corn here. Open Interest & Delta: Looking like both longs & shorts are chasing this move.” This comment suggests that both bullish and bearish traders are actively participating, leading to heightened market volatility and price movement.

Additionally, Skew pointed out specific activity on the Binance spot market: “Still persistent spot supply around mid $38K area. Bid driven by spot takers & limit asks were filled. If takers can sustain bid momentum & clear that supply then could be looking for limit chasing on the bid for higher prices.”

Byzantine General, another crypto analyst, found another major driver for the recent price action. He stated, “Spot markets are still trading at a premium, not just Coinbase. And the fact that USD markets are consistently trading a lot higher than USDT markets makes me think that perhaps new money is flowing in.”

#4 Breakout Move On Lower Time Frames

From a technical standpoint, crypto pundit Scott Melker observed a breakout move on the lower time frames. He noted, “Bitcoin breaking out on low time frame. “ In the 15-minute chart, Bitcoin has been trading within a descending channel, a pattern marked by sequential lower highs and lower lows. This typically reflects a bearish trend.

However, a few hours ago, the Bitcoin price has managed to break above the upper boundary of this channel, a movement that is often interpreted as a potential reversal signal. The low time frame breakout is significant for traders because it indicates a shift in short-term sentiment, possibly setting the stage for a continued upward trajectory in the higher time frames.

At press time, BTC traded at $38,326.

Featured image from Unsplash / Kanchanara, chart from TradingView.com

Original Source: https://www.newsbtc.com/news/bitcoin/bitcoin-price-breaks-38000-reasons/