ETF Approval & Price Action

It has been a watershed month for Bitcoin and the cryptocurrency markets in general, the main event being the SEC approving 11 different Spot Bitcoin ETF applications. With financial heavyweights like Charles Schwab now participating in the Bitcoin ETF arena, the landscape of cryptocurrency investments as we know it might be about to change forever. 

Interestingly enough, Bitcoin experienced a temporary dip in price post ETF announcement, a move which was anticipated by many as part of a ‘sell-the-news’ event. A lot of speculators and traders believed that a lot of the price action relating to the hype around the ETF approval had already been priced in before the SEC released their official statement, and any further moves to the upside were therefore temporarily unlikely. 

However, BTC price action has broken back above $40K over the past week and did so with relative ease, which could serve as another bullish indicator for the crypto markets as we head into the next big narrative: the Bitcoin Halving of 2024. This doesn’t mean that price action will go up only, and as tends to be the case in crypto, there can be multiple ‘flash crashes’ and minor to moderate dips along the way. 

Bitcoin’s current maintenance of its value above the $42,000 mark, and its recovery from last weekend’s downturn, is significant. The leading cryptocurrency does face some potential resistance at $43,600 and $45,589, which are both key levels in its current upward movement. Also, a daily or weekly close below $40,000 could challenge this bullish trend and potentially lead to a decline towards support zones between $38,155. 

Some Key On-Chain Metrics

In a noteworthy on-chain development highlighted by crypto analyst Joe Burnett, there has been a substantial decrease in Bitcoin balances on exchanges. Over a million BTC has left these wallets since 2020, emphasizing Bitcoin’s scarcity due to its fixed supply of 21 million. This trend aligns with the bullish sentiment for Bitcoin, particularly in light of the upcoming Halving event. Historically, these halvings have acted as catalysts for price increases, adding an element of anticipation to the market.

Additional data from Glassnode sheds light on another interesting trend: the decrease in wallet addresses holding less than 1 BTC since Bitcoin’s local peak of $49,000. This trend indicates a period of consolidation and stability around the $40,000 level, suggesting a maturing market.

Glassnode’s analysis also reveals an increase in the short-term holder realized price for Bitcoin, indicating that the cryptocurrency is being acquired at higher prices. This supports the overall uptrend in Bitcoin’s value and underpins its recovery trajectory.