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"The price of BTC saw a significant increase today, reaching $28,168. While there are many factors contributing to this jump, the primary reasons are as follows:
1. SEC's decision not to appeal the Grayscale Bitcoin ETF ruling:
Late on Friday, it became known that the U.S. Securities and Exchange Commission (SEC) decided not to appeal the judgment favorable to Grayscale, which would allow the conversion of the Grayscale Bitcoin Trust (GBTC) into a spot ETF. This decision may not have been fully reflected in the Friday Bitcoin price, which only increased by 1.2% (and quickly retraced), in contrast to the 8% surge seen on August 29 when the preliminary ruling was announced.
This move signals that the SEC may be prepared to give the green light to Bitcoin ETFs in the coming weeks. The 45-day period for seeking a reconsideration has passed. Grayscale's team remains ready to convert GBTC into an ETF once approved by the SEC. The likelihood of the spot ETF launching is estimated to be around 90%, potentially approved by January 10.
2. Correlation between BTC and Gold:
Driven by central bank policies, U.S. fiscal challenges, and events like the Israel-Hamas conflict, the price of gold increased by more than 6.5% from October 6 to last week's Friday.
It's worth noting that a clear pattern has emerged in the gold market, where smart investors, often referred to as ""smart money,"" have strategically utilized price dips to increase their long positions, particularly around the $1,820 to $1,860 price range, indicating a fundamental shift in the trajectory of gold pricing.
These changing dynamics in the gold market have significant implications for Bitcoin. Historically, gold has often led trends, with Bitcoin following suit. This leading-lagging relationship may be crucial in predicting Bitcoin's current trend. As gold appears to be heading for a bullish path, Bitcoin, influenced by unique catalysts like the approval of a spot ETF, may mimic gold's movement.
3. Short-term Squeeze:
From a more technical perspective, significant activity in the BTC futures market has played a role in the price surge. So far today, roughly $20 million in short positions has been liquidated, marking the highest amount since October 1 when $37.5 million in shorts were cleared. In a short period of time, BTC rose from $27,000 to nearly $28,100, marking a 4% increase.
In summary, Bitcoin's impressive surge to $28,000 can be attributed to regulatory developments, its correlation with gold, the enhanced influence of large holders or ""whales,"" and a combination of significant futures market activity. At the time of writing, BTC is trading at around $27,700." |
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Post time 20-10-2023 11:15:55
