After an all-time-high at around $64,000, Bitcoin has been back-fronting to the $30,000 zone for a few months, only to start climbing again recently to a new level just yesterday. But what are the causes of this movement and, above all, what are the future predictions? To know this, we need to consider various factors of a technical and fundamental nature. Let's go into these aspects one by one.
Technical analysis
In the last few days, the price first broke through the psychological resistance at $60,000 and then that of the last ATH at $64,000, up to the so-called "price discovery". As for the supports, however, the level of $50-52000 seems to have a nice pool of demand and acts as a possible entry, in the event of a retracement. The indicators are extremely bullish: the moving averages marked a Golden Cross in early September and continue on their upward path providing support at $45,000 (MA200) and $50,000 (MA50). The RSI, on the other hand, is found at a value of 78, which is in an area that indicates that there is a lot of buying power. In the past cycles this indicator has marked two peaks, one on the first rise in the price and one a few months later, corresponding to the actual rise. This gives hope that new price highs will occur upon entering the overbought threshold.
BTC Dominance and Total Marketcap
The Bitcoin Dominance has marked a graphical turnaround and is recovering levels. This means that capital is shifting to Bitcoin, disadvantaging altcoins. This can be understood as the confirmation of what is indicated by the RSI indicator, which highlights the increase in purchasing power. If this Dominance trend continues, it could be dangerous to open positions on altcoins, while for BTC it would indicate an increase in demand.
As for the Total Market Cap of cryptocurrencies, just in the last week it broke up the highs hitting a value of 2.69T. Its chart is extremely bullish thanks to structures of increasing highs and lows. To sum up: if its value grows further this indicates the entry of investors and capital that increase demand with their purchasing power.
Stock to flow
As we all know, the S2F model is perfectly tracking the price trend of BTC. At the moment, looking at the chart you can see how the price is getting closer to the median line, returning within the blue bands. If it were to follow it in November, an indicative price of 100 thousand dollars is expected.
There have been more and more rumors lately about the imminent approval of an ETF by the SEC. But what is an ETF and why is this a bullish factor for Bitcoin? It is a financial product that allows an investor to buy BTC indirectly. Many investors lack the ability or willingness to buy and hold cryptocurrencies and therefore prefer "second line" exposure. This product, in fact, tracks the spot price of Bitcoin (or Futures) and is traded in traditional stock exchanges. To date, there are several ETFs pending approval and some are expected right between October and November. If Bitcoin were to land on the world stock market, many investors could decide to allocate part of their portfolio to it and this would mean an increase in demand. Finally, since the supply is fixed, the forced consequence is the price increase. Gold is a clear example of this, the price of which multiplied x5 by what the first ETF was approved in 2004.
Conclusion
I always reiterate that no one can know how it will go because there is no high historicity in the price of Bitcoin, however many factors outline a somewhat bullish sentiment. Furthermore, predicting an asset price trend is never easy, but by combining all the factors involved, a general idea can be extrapolated. At the moment, the market sentiment looks very positive and given the trend of the Total Market Cap and the positive news coming on ETFs, investors are expecting an imminent price hike.
Not a financial advice.
DYOR before invest.
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