Bitcoin’s price experienced a brief surge of almost 10% following false reports of ETF approval on Monday, only to retract to $28,555. The second deadline for Fidelity, VanEck, and WisdomTree applications, which is slated for October 17, is also expected to be postponed.
Despite the liquidation of $86 million in short positions on Monday, Bitcoin investors managed to capitalize on the situation, reflected in the NUPL touching a two-month high. While the rise in Bitcoin’s price brought gains for many, it resulted in significant losses for those who witnessed nearly $86 million worth of shorts being liquidated. Nevertheless, the overall market sentiment remains resilient, suggesting that Bitcoin holders continue to stand firm.
Bitcoin encounters the SEC once more.
As of the current writing, Bitcoin, priced at $28,538, created a stir on Monday, driven by a false report. The cryptocurrency surged by over 10% at its intraday peak before retracing to $28,500, leading to short liquidations worth $86 million in the market.
However, despite the clarification of the situation, the ETF saga is far from over. The Securities and Exchange Commission (SEC) is poised to reveal its verdict on the spot ETF applications from Fidelity, VanEck, and WisdomTree on October 17 (today). According to insights from Bloomberg ETF analyst Eric Balchunas, it’s highly likely that the approval will be postponed until January 2024.
If this scenario unfolds, the Bitcoin price is expected to maintain its current position with a modest bullish inclination.
The Net Unrealized Profit/Loss (NUPL) indicator, which assesses the collective paper profits and losses in Bitcoin held by investors, serves as a valuable tool for monitoring investor sentiment. Currently, the NUPL is at a two-month peak, reflecting the upswing from Monday. This indicates that investors, on the whole, are in a profitable position and likely harbor optimism regarding potential further recovery. However, they remain cautious, as a macro bullish signal has not been officially confirmed.
The Bitcoin NUPL (Net Unrealized Profit/Loss) leaves BTC susceptible to profit-taking, potentially leading to a correction in Bitcoin’s price.
The Bitcoin price is expected to turn positive.
At its current position just above $28,500, the Bitcoin price has successfully converted the $28,354 resistance into a supportive foundation. This level holds significance for Bitcoin’s potential advancement towards $30,000.
With the prevailing bullish market sentiment, Bitcoin has the opportunity to extend its ascent and surpass the $29,000 threshold. However, it’s worth noting that the Relative Strength Index (RSI) indicates that the market may be approaching overbought conditions, posing a potential risk of a correction.
In the event of a correction, Bitcoin’s price is expected, at most, to retrace to $27,418 while retaining its bullish stance. Nevertheless, should it breach not only this support level but also the 50, 100, and 200-day Exponential Moving Averages (EMA), it would nullify the bullish outlook, potentially propelling the cryptocurrency below $27,000 and towards $26,483.
Frequently Asked Questions (FAQs) About Cryptocurrency Metrics
What constitutes the circulating supply?
The creator or developer of each cryptocurrency establishes the maximum number of tokens that can be created or issued. A specific quantity of these assets can be generated through processes like mining, staking, or alternative methods, as defined by the underlying blockchain technology’s algorithm. For instance, Bitcoin’s circulating supply is determined by the total number of BTCs mined since its inception, which currently stands at 19,445,656 BTC.
Conversely, the circulating supply can also decrease due to actions such as token burning or inadvertently transferring assets to addresses on incompatible blockchains.
What does market capitalization signify?
Market capitalization is calculated by multiplying the current market value of a specific asset by its circulating supply. In the case of Bitcoin, as of the start of August 2023, the market capitalization exceeds $570 billion. This figure is derived from the multiplication of the circulating supply of over 19 million BTC by the prevailing Bitcoin price of approximately $29,600.
What is trading volume?
Trading volume represents the overall quantity of tokens associated with a particular asset that has been traded or swapped between buyers and sellers during defined trading intervals, typically over a 24-hour period. It serves as a measure of market sentiment, encompassing the aggregate trading activity across both centralized and decentralized exchanges. An escalation in trading volume frequently signifies heightened interest in a given asset, reflecting increased participation as more individuals engage in the buying and selling of the cryptocurrency.
What is funding rate?
Funding rates serve as a mechanism intended to incentivize traders to establish positions, thereby maintaining alignment between perpetual contract prices and spot market values. They are implemented by exchanges to ensure that future prices and index prices make consistent periodic adjustments. When the funding rate is positive, it signifies that the price of the perpetual contract exceeds the mark price. In this scenario, traders with bullish sentiment who have initiated long positions pay compensation to traders who have taken short positions. Conversely, a negative funding rate indicates that perpetual contract prices are lower than the mark price, causing traders with short positions to provide compensation to traders who have entered long positions.