On October 20, Bitcoin (BTC) managed to reclaim the $30,000 mark, nullifying the losses incurred due to the significant sell-offs following an erroneous report by Cointelegraph on Monday. On-chain analysis now outlines the potential factors that could propel BTC toward the $40,000 milestone.
Cryptocurrency ETFs Gain Momentum!
The cryptocurrency markets have responded positively to several bullish macro events, including Grayscale’s recent application for a spot Bitcoin ETF with the U.S. Securities and Exchange Commission. This resurgence in optimism propelled the price of Bitcoin to reach $30,000 last Friday. The question now is whether investors will maintain this upward momentum and push for a reclaim of the $40,000 mark. Bitcoin’s price exceeded $30,000 on Friday, marking a significant double-digit increase for the week. However, crucial indicators suggest that BTC prices could continue their ascent in the days ahead.
Bitcoin dominance (BTC.D) has been on a 10-day consecutive increase since October 10. This trend is somewhat atypical because historically, when Bitcoin experiences substantial gains and surpasses key price levels, investors tend to diversify into altcoins to seek additional growth opportunities.
However, the prevailing macroeconomic landscape and events related to the Middle East crisis may dissuade investors from shifting their funds to altcoins this time. The ongoing rise in BTC.D may lend further support to the notion that Bitcoin’s “safe haven” status is strengthening and contributing to the ongoing price surge.
Based on the data, when the crisis erupted on October 7, Bitcoin’s share of the cryptocurrency market stood at 51%. After two weeks of heightened tensions, Bitcoin has continued to gain ground, with BTC.D reaching 52.71% on October 20. Bitcoin dominance (BTC.D) represents the percentage of the total cryptocurrency market valuation currently held by Bitcoin. In bearish macro conditions, a rising BTC market share could signal that investors are displaying a reduced appetite for risk and are turning to Bitcoin as a safe haven asset.
Anticipation of BTC Price Rise
A comparable scenario unfolded following the outbreak of the Russia-Ukraine war on February 24, 2022. Bitcoin’s dominance in the cryptocurrency market surged from 44% to 48% within a mere two weeks. Subsequent to the initial price dip triggered by concerns related to the war, Bitcoin’s value saw a 51% upswing, rising from $20,200 to $30,400 between March 10 and April 10, 2022, as cryptocurrency investors sought the safe haven attributes of Bitcoin.
The present increase in Bitcoin’s price and the patterns observed in BTC.D trends bear resemblance to the events that transpired in the aftermath of the Russia-Ukraine conflict. Should history echo itself, a 50% upturn may drive Bitcoin’s price significantly beyond $40,000 in the weeks to come.