Bitcoin has made a strong start to 2024, soaring about 9% to $45,925, its high since April 2022. Multiple factors are fueling this rise, including on-chain data, fundamental circumstances, and technical indicators.
One key factor is the speculation around the U.S. Securities and Exchange Commission (SEC)'s decision on several spot Bitcoin Exchange-Traded Fund (ETF) applications. The decision might precede the official approval window beginning on Jan. 4. Data from CME Bitcoin futures indicates that investors are optimistic about increased BTC prices, showcasing a "contango" situation where Bitcoin futures are trading at a roughly $1,300 premium to Bitcoin's current value. This suggests traders expect a price rise resulting from the demand increase anticipated from a Bitcoin ETF approval.
Moreover, there has been a noticeable rise in withdrawals from crypto exchanges, indicating increased buying pressure as traders remove their Bitcoin holdings from exchanges to hold longer-term. This trend aligns with the broader multi-month dwindling of balances across all crypto exchanges, reflecting that traders expect higher prices leading up to the SEC's ETF decision.
Technically, Bitcoin has entered the breakout stage of an ascending triangle pattern, a bullish signal in trend analysis. This breakout suggests Bitcoin could be targeting a price below $50,000, adding another factor contributing to the recent price uptick. As Bitcoin reaches 21-month highs, market participants are keenly observing how these on-chain, fundamental, and technical factors continue to play out.
