Bitcoin Bulls Maintain Control
The Bitcoin (BTC) bulls continue to dominate the market, with the world’s largest cryptocurrency by market capitalization consolidating above the $34,500 mark following a more than 15% surge last week.
Key Factors Driving BTC’s Strength
Optimism Surrounding Spot Bitcoin ETF Approvals and Safe Haven Narrative
Anticipation of upcoming approvals for spot Bitcoin exchange-traded funds (ETFs) in the US, coupled with Bitcoin’s performance outpacing the declining stock and bond markets, is providing crucial support for BTC. This strength is particularly notable as it coincides with a week filled with significant US economic events.
US Economic Events and Bitcoin’s Resilience
This week holds several pivotal US economic events. The Federal Reserve will announce its latest monetary policy decision on Wednesday, and the release of the key monthly US jobs report and ISM PMI survey data is also on the horizon.
Bitcoin’s Resilience Amid Stock Market Weakness
In October, strong US economic data and hawkish communications from the US Federal Reserve, indicating a prolonged period of high-interest rates, have kept stocks under pressure. Bitcoin’s ability to outperform in this environment is noteworthy, especially given its historical correlation with stocks, notably in 2022.
Bullish Outlook for BTC
Bullish forecasts for BTC remain, with Matrixport recently predicting a move to at least $42,000 upon the official approval of spot Bitcoin ETFs in the US.
Indicators of Whale Activity
On-chain Data Signals Growing Enthusiasm
On-chain data supports the growing excitement in the Bitcoin market. Data from crypto analytics firm IntoTheBlock reveals that the number of large transactions valued at over $100,000 on the Bitcoin blockchain reached its peak in 2023 last week.
“The Bitcoin spot ETF applications appear to have increased whales’ and institutions’ appetite for Bitcoin,” stated IntoTheBlock in a Medium blog post. They further suggested that “the recent rise in institutional activity might be a harbinger for what comes in 2024.”
Increased Transaction Volumes
The surge in large transactions aligns with the rising dollar value of total transfer volumes on the Bitcoin blockchain. A seven-day exponential moving average of this metric recently reached a near-one-year high above $32.5 billion last week, according to Glassnode’s data.
Bitcoin Transaction Trends
The number of Bitcoin transactions has exhibited significant fluctuations in recent months. The seven-day exponential moving average reached a new all-time high of nearly 600,000 per day last month, followed by a sharp pullback and a subsequent rebound in recent weeks.
Bullish Narratives for BTC
In addition to spot Bitcoin ETF approvals, several bullish narratives are expected to support Bitcoin’s price in 2024. These include the halving of the Bitcoin issuance rate, the commencement of a new Fed interest rate cutting cycle, and the potential for greater regulatory and congressional clarity in the US, all of which have the potential to bolster BTC’s value.