Bitcoin (BTC) has achieved a significant milestone by surpassing the Terra Luna UST capitulation level after an 18-month period marked by fluctuations. This recent surge in the flagship cryptocurrency's value has been predominantly fueled by heightened demand from institutional investors.
During the past weekend, Bitcoin underwent a robust breakout, resulting in a more than 5% increase within the last 24 hours. This surge propelled its trading price to approximately $41,400 in the early London session on Monday. The rapid ascent has also triggered over $72 million in liquidations in derivatives leverage trading, disproportionately impacting short traders.
Factors Behind Bitcoin’s Rally:
1. Institutional Adoption:
The recent uptrend in Bitcoin's value is largely attributed to its expanding integration into the United States' financial system, a market known for its sophistication and development. Of particular note is MicroStrategy's purchase of more than $593 million worth of Bitcoins, financed through share sales in November, attracting attention from prominent investors like BlackRock. This trend underscores the growing institutional fascination with Bitcoin.
2. US Space Force Major’s Endorsement:
United States Space Force Major Jason Lowery has advocated for the Defense Department to explore adopting Bitcoin as part of an 'offset strategy.' Lowery sees Bitcoin, alongside its underlying Proof of Work (PoW) technology, as modern tools that could reshape the realm of cyber warfare and defense. Endorsements like these from influential figures hold the potential to significantly influence the perception and adoption of Bitcoin.
3. Spot ETF FOMO:
The upcoming possibility of spot Bitcoin Exchange-Traded Funds (ETFs) being adopted in the United States market has been a major catalyst behind the current rally. Analysts foresee the potential approval of all spot BTC ETFs by the U.S. Securities and Exchange Commission (SEC) before January 10, 2024. This anticipation has sparked a significant surge in FOMO (Fear of Missing Out) trading activity, as investors rush to seize the potential advantages presented by these ETFs.
What Next For BTC Price?
Bitcoin's price is edging closer to a significant psychological resistance level of around $42,000, a target previously highlighted by numerous analysts. Simultaneously, the altcoin market, spearheaded by Ethereum (ETH), is displaying a bullish breakout. Considering these market dynamics, there exists the potential for Bitcoin's price to retrace towards the support range spanning between $31,000 and $34,000, either before or after the impending halving event.
