Bitcoin (BTC) is currently facing a challenge to maintain its price at the $34,000 level following a remarkable rally and short squeeze that propelled its price above $35,000 on October 23. Charles Edwards, the founder of Capriole Investments, commented on the recent market developments on October 24. He noted that after seven months of consolidation, Bitcoin’s upward movement effortlessly broke through the $32,000 resistance level, showing its strength. Edwards expressed his belief that the upcoming monthly resistance would not pose a significant obstacle for Bitcoin’s continued rise. He suggested that there could either be a rapid continuation to the mid-range level around $43,000 or a short-term consolidation between the support and resistance levels at $32,000 and $35,000 before further upward movement.
In a previous update, Cointelegraph highlighted that multiple daily closes above the $31,700 level would be noteworthy. This is because such daily or weekly higher highs would position the price of Bitcoin above a key pivot point, entering territory not seen since May 2022.
Edwards agrees that the recent excitement surrounding the possibility of the SEC approving a spot Bitcoin ETF in the near future is contributing to the ongoing rally. However, he also believes that there are several other factors at play. LayerTwo Labs founder Paul Sztorc concurs with Edwards, suggesting that Bitcoin is decoupling from equities, surprising many market participants. Sztorc speculates that concerns about foreign conflicts and rising macroeconomic uncertainty may have led traders to anticipate a dip in Bitcoin’s price, which ultimately did not materialize. He draws a parallel with the U.S. regional banking crisis, which also resulted in Bitcoin outperforming other assets.
Sztorc suggests that the recent divergence in price action is indicative of traders and investors accumulating Bitcoin in anticipation of future events. He predicts that the Federal Reserve may need to start easing monetary policy due to rapidly rising yields. Traders are likely expecting this easing to take the form of some yield-curve control, which tends to lead to monetary debasement.
Additional evidence suggesting a growing acceptance of Bitcoin by institutional investors and the potential approval of a spot BTC ETF comes from the Chicago Mercantile Exchange (CME). The CME recently reported a new record of open interest above 100,000 BTC. This surge in open interest signifies that institutional investors who accumulate spot Bitcoin also need to hedge their positions, leading to increased trading volumes and open interest on platforms like CME.
It is important to note that this article does not provide investment advice or recommendations. Every investment and trading decision comes with risks, and readers should conduct their own research before making any decisions.