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News/Here Comes the Bitcoin Revolution? Unveiling ETFs, Whales, and Market Volatility

Here Comes the Bitcoin Revolution? Unveiling ETFs, Whales, and Market Volatility

Van Thanh Le

Nov 2 2023

8 months ago4 minutes read
Chibi robot balancing Bitcoin and ETF on seesaw

A Closer Look at Regulatory Landscape: Bitcoin ETFs in Perspective

The winds of change in the world of cryptocurrency seem to be in full motion, with the inclusion of Invesco Galaxy Spot Bitcoin ETF on the DTCC website. This move extends beyond mere listing, hinting at a broader acceptance in the vastly complex financial landscape. It symbolizes an advanced approach to interaction with the asset, possibly promising a less grim regulatory future.

Invesco Galaxy Bitcoin ETF listed on the DTCC’s site.webp
Invesco Galaxy Bitcoin ETF listed on the DTCC’s site. Source: DTCC

Emerging amidst this potential shift in fortune, we have BlackRock's Bitcoin ETF. This ambitious project is allegedly backed by industry behemoths Jane Street, Jump, and Virtu, suggesting a sturdy layer of market credibility and strong trading support.

The Bitcoin ETF approval, which market pundits speculate could roll out by January, is more than just a nod from regulators. Potentially, it could trigger a domino effect, launching Bitcoin prices to reach new record levels, while simultaneously altering the asset's risk profile.  


Navigating Through Market Volatility: The Cryptocurrency Dance

Bitcoin's fragile price stability has recently led to a staggering $100 million worth of liquidations. Before the Federal Reserve interest rate decision, Bitcoin briefly hit $35,000 then stepped back, causing turbulence in the market. Far from just being a statistic, it paints a vivid picture of the merciless volatility the market brings upon traders.

chart.webp

The last time Bitcoin grazed the $35,000 mark was at the month-end of October. This price movement was far from arbitrary. Bloomberg Intelligence predicts a 90% chance of the ETF approval by January 10, 2024, which could potentially drive the price of Bitcoin to $150,000

Institutional demand for a Bitcoin ETF is high, and the approval could counter the effects of recent crypto crackdowns and allow regulated access to the crypto market for US firms. The SEC's engagement with ETF applications and non-appeal of the Grayscale case outcome suggests a favorable verdict is likely. Accepting a Bitcoin ETF would be a significant step toward mainstream adoption and simplify Bitcoin investment. 


The Behemoths of Cryptospace: Decoding Whale Behavior

Bitcoin whales, the influential and sizeable entities within the crypto space, have started to increase their selling ventures. The numbers seem to be in favor of sellers, proven by the surge in the "exchange whale ratio." This statistic, a measure of the sum of the top 10 transfers to exchanges against total exchange inflow, is potentially signaling a price correction towards the $31,000 to $32,000 range. 

Conversely, some Bitcoin whales have exhibited a particular penchant for shopping, accumulating over $600 million in BTC within a week. This flurry happened amidst varying market prices and suggests strong bullish sentiment among these influential players. 

The 72-hour MA value of the metric seems to have gone up in recent days.webp
The 72-hour MA value has increased recently. Source: CryptoQuant

SkyBridge, the hedge fund company led by Anthony Scaramucci, also revealed investments in Bitcoin, Solana, and technology companies. The size of the investments has not been disclosed, but October was the company's best month ever. 

Highlighting the terrifying influence these whales wield, the Bitcoin supply distribution showed a noticeable increase, particularly within the 10,000 to 100,000 BTC bracket. This fact points to a growing concentration of crypto-wealth and a potential for massive market influence.


Diving Deep into Market Metrics: An Exploration

Stock exchange with traders and Bitcoin symbol.webp

Despite the ongoing activity in the Bitcoin landscape, the total number of BTC holders has plateaued, narrowly revolving around 49 million. This lack of growth hints at a potential market saturation or perhaps an increased sense of caution among investors.

The Relative Strength Index (RSI), traditionally considered a technical momentum indicator, is not just above 80 – it indicates a particularly bullish market trend. Usually, an RSI value above 70 is considered overbought. Hence, an RSI above 80 implies an extraordinarily confident upward trend. 

On the global front, the Federal Reserve's benchmark fed funds rate is expected to maintain a steady reign at 5.25%-5.50%. Far from being a mere U.S. economic indicator, it influences global markets, indirectly affecting Bitcoin's price. Any dovish signal from the Fed could provide the spark needed for Bitcoin to leap from its current $34,000-$35,000 band.


Weighing Words: Statements that Tip the Scales

Adding a layer of professional insight to existing market data, an analyst speaking in a CryptoQuant Quicktake post said, "I expect increased volatility in Bitcoin and anticipate a new local bottom with a drop to the 31,000 to 32,000 dollar range." 


New Month, New Bitcoin: Market Dynamics and Price Movements

Despite the Federal Reserve's decision to maintain the current interest rates, Bitcoin’s price showcased commendable stability. Meanwhile, an altcoin rally led by Solana lit up the cryptocurrency market with optimism

However, Bitcoin broke from its stable course as it surged to a new yearly high, surpassing the $35,500 mark. This price surge led to over $100 million in short liquidations, potentially indicating a shift towards a bullish market. 

chart (2).png

BTC Performance and "Santa Rally" Predictions

Bitcoin ended October on a strong note, recording an over 28% increase, marking the highest monthly close since May 2022. Further into the future, market analysts from Matrixport anticipate a "Santa rally" that could propel Bitcoin’s price to a promising $56,000 by the end of the year.

If Bitcoin is up +100% by now, there is a +71% chance it will rally +65% or more by Dec 31.png
If Bitcoin is up +100% by now, there is a +71% chance it will rally +65% or more by Dec 31. Source: Matrixport Technologies

Inflows and Whale Movements in the Cryptocurrency Market

The month of October also witnessed a remarkable surge in the market capitalization of Tether (USDT), moving from a $83.43B cap at the beginning of the month to reach a $84.93B cap on November 2. This upward trend suggests a significant influx of traditional finances into the crypto market. 

Meanwhile, Bitcoin whale addresses that had been dormant for six long years sprang back into action, moving a substantial $230 million in Bitcoin.

chart (3).png

Institutional Investments and Market Perceptions

The third quarter of the year saw MicroStrategy’s Bitcoin investment surprisingly profitable despite a net loss of $143.4 million. The corporation invested in an additional 6,067 BTC, raising their total BTC possession to a staggering 158,400. 

Meanwhile, Jurrien Timmer, Fidelity's director of global macro, expressed a bullish outlook towards Bitcoin, seeing it as a potent store of value in the digital era.

The discount on Grayscale's Bitcoin Trust (GBTC) hit a 23-month low, suggesting investors’ optimism about a potential ETF conversion, hinting at further positive developments in the Bitcoin market.


An Investor's Guide: Key Takeaways for the Bitcoin Market

Poker table with Bitcoin and regulatory cards.webp

The Bitcoin market appears to be a multifaceted arena, reflecting a broad spectrum of regulatory developments, market volatility, and influential players such as whales. Details such as Bitcoin ETF approvals, Federal Reserve rates, and whale activities can drastically morph the Bitcoin landscape. 

As the regulatory stage is set to witness potentially crucial changes and the whales stir the market, we're on the edge of a fresh chapter for Bitcoin. The question is – Are you ready to plunge into this thrilling landscape?


Frequently Asked Questions

1. How does Invesco Galaxy's Spot Bitcoin ETF listing on the DTCC website influence the cryptocurrency market? 

The prominent display of Invesco Galaxy's Spot Bitcoin ETF on the DTCC website signifies potential acceptance in a larger financial landscape, pointing towards an increased openness to regulated Bitcoin ETF products.

2. How is the behavior of Bitcoin whales affecting Bitcoin's price? 

Bitcoin whales with significantly large holdings can impact Bitcoin prices through their actions. Increased selling activities can lead to price corrections, while their accumulative behavior might reflect a bullish sentiment, indicating potential upward trends.

3. What's the projected impact of Bitcoin ETF approval on Bitcoin prices? 

If approved, Bitcoin ETFs could provide a more flexible and regulated avenue for investors to engage with Bitcoin. This could enhance the asset's legitimacy, potentially driving Bitcoin prices to new highs.

4. How could the Federal Reserve's benchmark fed funds rate impact Bitcoin's price? 

The Federal Reserve's benchmark fed funds rate indirectly affects globally traded assets, including Bitcoin. A steadfast rate could provide stability, allowing Bitcoin to break out of its current price constraints.

5.  What is the implication of the analyst's prediction in the CryptoQuant Quicktake post in relation to Bitcoin's future price? 

The analyst expresses an anticipation of increased Bitcoin volatility, suggesting a fall to the $31,000 to $32,000 range. This implies a possible temporary price dip, a crucial pointer for investors planning short-term trading.

This article has been refined and enhanced by ChatGPT.

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