Bitcoin experienced a further rise on Tuesday, capitalizing on its gain from the previous day. The surge in price comes amidst growing optimism surrounding the approval of a crypto-based exchange traded fund (ETF) in the United States.
According to CoinDesk data, the cryptocurrency BTCUSD saw an increase of more than 11%, reaching a high of $35,144 on Tuesday. This marks the highest level since May 2022. Although Bitcoin is still down 50% from its all-time high in 2021, it has gained over 105% so far this year.
Investors responded positively to recent developments that suggest Bitcoin ETFs may soon become a reality. The United States Securities and Exchange Commission (SEC) has repeatedly rejected previous applications due to concerns over market manipulation. However, with incremental steps being taken towards approval, there is growing anticipation within the market. In fact, analysts at QCP Capital believe that the approval of a Bitcoin ETF has become the base case scenario, leading to the market pricing in this possibility.
In addition to these developments, some investors are turning to Bitcoin as a potential safe haven asset amidst the escalating Israel-Hamas conflict. This serves as another factor contributing to Bitcoin’s rally.
Furthermore, a short squeeze also played a role in driving up Bitcoin prices. Traders with short positions were forced to buy Bitcoin in order to cover their losses, resulting in approximately $186 million worth of short Bitcoin positions being liquidated over the past 24 hours.
From a technical standpoint, Bitcoin’s short-term indicators indicate a bullish trend. It is currently facing a key resistance level at $35,924, according to market analyst Patrick Munnelly.
In summary, Bitcoin’s recent surge in price can be attributed to increased hopes for the approval of a Bitcoin ETF in the United States, growing interest as a safe haven asset, and a short squeeze phenomenon. This has led to a bullish outlook for the cryptocurrency in the short-term.