will he return to historic heights?

Bitcoin (BTC) has climbed 32% since early October, quickly approaching the record price it hit in April.

With some observers long predicting that the cryptocurrency could eventually reach $ 100,000, the recent price hike has renewed calls for the price to extend its long-term rally to this key level.

What is the outlook as bitcoin moves closer to the highest prices of all time? Is he likely to set a new high, or meet resistance and back down?

In this article, we take a look at what drove the latest move in bitcoin’s trend and the predictions for the height of the price.

Bitcoin ETF plans indicate wider acceptance

Bitcoin’s price rose in part in response to news that the United States’ Securities and Exchange Commission (SEC) has approved the first bitcoin-linked exchange-traded fund (ETF), of dozens awaiting approval. . The Volt Bitcoin Revolution ETF, which will be launched by Volt Equity in the coming weeks, “will not invest directly in bitcoin but will invest in companies that support bitcoin and the bitcoin blockchain ecosystem,” according to a prospectus filed October 1.

The fund defines “companies of the Bitcoin revolution” as those that hold or have held bitcoin on their balance sheet, actively use, invest or mine bitcoin, or have products that benefit from bitcoin and blockchain technology. This also includes companies that develop, produce or supply technology to support the creation or transmission of bitcoin or blockchain technology, depending on the filing.

The fund will invest “at least 80%” of its net assets in stocks, options and ETFs, with the remaining 20% ​​invested in the broader stock markets to offset the risk of focusing so heavily on equity-linked assets. bitcoin. Volt Equity has said it will invest up to 25% of the fund in MicroStrategy (MSTR), a US software analysis company that has a large bitcoin position on its balance sheet.

Although there are currently other ETFs traded in the US markets that invest in companies involved in cryptocurrencies, such as the Siren NASDAQ NextGen Economy ETF (BLCN) and the Amplify Transformational Data Sharing (BLOK) ETF , the Volt offer focuses exclusively on the bitcoin ecosystem. However, several Bitcoin ETFs were launched this year on the Toronto Stock Exchange (TSX) in Canada, including the Purpose Bitcoin ETF, Evolve Bitcoin ETF (EBIT), CI Galaxy Bitcoin ETF (BTCX), and 3iQ CoinShares Bitcoin ETF ( BTCQ).

Institutional interest in bitcoin has risen sharply in recent months, contributing to the rise in prices and further fueling calls to launch bitcoin ETFs. There are several other ETFs the SEC must make an approval decision on this month, and SEC Chairman Gary Gensler has been making comments since August suggesting he would back a contract-based ETF at term.

A comment by US Federal Reserve Chairman Jerome Powell during a congressional hearing on September 30 that he had “no intention” to ban or limit the use of cryptocurrency added additional market support.

Bitcoin Price Approaches All-Time High

Cryptocurrency markets soared earlier this year, driven by the growing acceptance of bitcoin for payments, as well as the emergence of decentralized finance (DeFi) and functioning non-fungible tokens (NFTs). on the Ethereum blockchain. The rally set a new bitcoin record of $ 64,863.10 on April 14. But the price of bitcoin fell more than 54% to $ 29,360.96 on July 20, in response to concerns about the market’s adoption as U.S. electric vehicle company Tesla (TSLA). stopped accepting bitcoin for payments, and the Chinese government has cracked down on cryptocurrency mining and trading.

The market rebounded over the summer and bitcoin returned above $ 50,000, hitting $ 52,853.76 on September 7. But a restriction on cryptocurrency trading activity in South Korea and new moves to ban crypto in China kept the market volatile and pushed the price down to $ 39,787.61 on September 21.

The rally that followed took the daily high to $ 57,793.04 on October 11, its highest level since May 12, when the market retreated from the all-time high.

Analysts at Arcane Research wrote in an October 12 weekly update: “It appears that the recent increase in the price of bitcoin may be attributable to increased institutional interest. Institutional traders are flocking to CME futures, betting on the approval of a bitcoin ETF backed by CME futures.

This is evidenced by CME’s increased share of the global open interest in bitcoin futures contracts, which reached its highest level since February 2021. The annualized base on the first month contract also rose sharply on CME this week, showing the increase in institutional demand for bitcoin futures.

The latest bitcoin price news has renewed claims that investors appear to be turning to bitcoin over gold as a safe haven, responding to disagreements in the US Congress over raising the country’s debt ceiling , continuing tensions between the United States and China, concerns about a potential default by Chinese real estate company Evergrande (3333) and a major Facebook outage (FB). Jeff Dorman, chief investment officer at digital asset management firm Arca, noted that the correlation between bitcoin and stocks collapsed last week, with the S&P 500 (US500) selling as BTC climbed.

The rise in the value of BTC near its highs has resulted in an increase in the number of investors who have made a profit on their holdings. The seven-day moving average for bitcoin’s share of earnings hit a five-month high of 93.163%, according to data from Glassnode. It also increased open interest perpetual futures on the FTX exchange to a 19-month high of $ 2.6 billion.

The dominance of bitcoin, which refers to bitcoin’s share of the overall cryptocurrency market cap, has exceeded 68% with its market cap returning above $ 1 billion. While altcoin prices, said to offer alternatives to BTC, have retreated as the bitcoin rally has accelerated, this could indicate that they will follow the market higher.

Arcane analysts said, “Bitcoin dominance is increasing and is at its highest level since late June, after a great period for altcoins.

“Historically, when bitcoin began to outperform altcoins, it was not long before retail traders tossed their altcoins against bitcoin, creating a feedback loop that drives the price of bitcoin even higher.”

As always, it is essential to keep in mind that past performance is not an indicator of future returns.

Bitcoin Analysis: What’s Next For The Biggest Crypto Market?

Where are analysts predicting the market to go – will bitcoin continue to rise or face resistance at the $ 60,000 level?

Some analysts and observers expect bitcoin to challenge the previous record of over $ 64,000 in the near term.

According to Arcane’s Bitcoin technical analysis: “After breaking through two resistance levels in the first few days of October, the price has now revisited new resistance levels from the spring. If bitcoin manages to break through these resistance levels in the next few days, we could see the price fighting very soon with all the weather. “

The US cryptocurrency exchange Kraken noted in its monthly market outlook that “4Q has always been the best quarter for BTC with an average and median return of + 119% and + 58% respectively. This, coupled with the fact that we saw sentiment rebound late last month after global markets lowered their risk in the face of Evergrande fears and negative headlines from China, suggests BTC is arguably becoming more resistant to traditional market turbulence. ”

Kraken’s latest bitcoin price prediction suggests the cryptocurrency may be approaching the $ 100,000 level.

“At BTC’s closing price at the end of the quarter of $ 43,800, a return of + 119% in 4Q2021 would place BTC at around $ 96,000, while a return of + 58% would place BTC at $ 69,000 . “

However, some leading investors, such as John Paulson, Hamish Douglass, Warren Buffett and Charlie Munger, continue to warn that the cryptocurrency markets could collapse.

JP Morgan CEO Jamie Dimon said at an Institute of International Finance event on October 11: “Personally, I think bitcoin is worthless.

However, the investment bank has provided access to cryptocurrencies since July. “Our clients are adults. They do not agree. This is what makes the markets. So if they want to have access to buy bitcoin from you, we can’t keep it, but we can give them legitimate access, as clean as possible, ”he said.

It’s important to keep in mind that cryptocurrency markets remain extremely volatile, making it difficult to accurately predict the price of a coin in a matter of hours, and even more difficult to give long-term estimates. As such, analysts can get their predictions wrong.

We recommend that you always do your own research and take into account the latest market trends, news, technical and fundamental analysis and expert opinions before making any investment decisions. And never invest more than you can afford to lose.

Follow Capital.com to stay up to date with the latest BTC price news, analysis and forecasts to spot the best potential trading opportunities.

Read more: Bitcoin retreats from five-month high in Asian trading

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