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Bitcoin experienced a surge on Monday morning, pushing its price above $31,000. Later in the day, the largest cryptocurrency by market capitalization gained further momentum, reaching a remarkable milestone of $35,000, a level not seen since May of the same year, as reported by CoinGecko.
This surge in Bitcoin’s value triggered a wave of short liquidations, resulting in a staggering $114 million being liquidated within just one hour. Across the entire cryptocurrency market, the total liquidation reached a significant $145 million, according to CoinGlass, an analytics firm.
On Coinbase, a leading cryptocurrency exchange, Bitcoin was trading at a premium close to the $36,000 mark.
These two consecutive rallies at the start of the week are widely attributed to the growing anticipation surrounding the potential approval of Bitcoin spot ETF applications by the U.S. Securities and Exchange Commission (SEC).
Earlier today, a judge in Washington, D.C. officially directed the SEC to revisit a long-pending and legally disputed spot Bitcoin ETF application filed by Grayscale. The regulatory agency had previously failed to respond to a court inquiry on the matter. In addition, global investment giant BlackRock has updated its own application, signaling its progress in launching a Bitcoin spot ETF, including fund allocation and securing a ticker symbol. Although these developments do not guarantee approval, they reflect confidence that the SEC will eventually give its approval.
Crypto analysts view both of these price surges as breaking through key market resistance levels at $31,000 and $35,000, indicating a bullish trend. Rekt Capital, a prominent voice on Crypto Twitter, suggests that this price action could disprove the “Bearish Bitcoin Fractal,” a pricing model predicting a rally to record highs followed by a significant downturn.
Is Bitcoin on the cusp of invalidating the Bearish Fractal?
Here are the Bearish Fractal Invalidation Criteria:
a) Bull Market Support Band holds as support ✅
b) Weekly Close beyond Lower High resistance ✅
c) Breach of $31k yearly highs ❌$BTC #Crypto #Bitcoin https://t.co/4H3OMiDzFB pic.twitter.com/mjoO8OF1Qs
— Rekt Capital (@rektcapital) October 23, 2023
Stocks Influenced by Bitcoin
Bitcoin has already shown remarkable growth this year, boasting an 87% increase even before today’s rally to $35,000. However, this upward trajectory has also lifted the stock prices of public crypto companies to even greater heights.
For instance, shares of the Grayscale Bitcoin Trust (GBTC), the world’s largest Bitcoin fund, have surged by 196% since the beginning of the year, outperforming the actual cryptocurrency itself. Grayscale intends to provide investors with direct exposure to its Bitcoin holdings by converting its fund into a spot Bitcoin ETF, should it receive regulatory approval. This transformation would enable each share in the fund to be redeemed for a fixed portion of BTC. The recent legal victory against the U.S. government has increased market confidence in this conversion, resulting in a substantial reduction in the discount at which GBTC shares trade compared to Grayscale’s Bitcoin holdings.
Other firms, like MicroStrategy (MSTR), have used their stock as a proxy for investing in Bitcoin. MicroStrategy’s stock has surged by 161% year-to-date, fueled by the company’s strategy of allocating a significant portion of its balance sheet to Bitcoin purchases, amassing a stash of 158,254 BTC valued at $4.8 billion.
In the same vein, Coinbase (COIN) saw a 6% increase in its share price on Monday, bringing its year-to-date gains to 135%. Coinbase’s performance has outshone traditional financial firms that have attempted to enter the Bitcoin market, bolstered by its resilience in the face of a U.S. government lawsuit and an endorsement from BlackRock as its chosen Bitcoin ETF custodian.
Coinbase continues to attract first-time crypto buyers, while its performance has overshadowed traditional finance firms aiming to compete as Bitcoin on-ramps.
Conversely, Block (formerly Square), the fintech company founded by Bitcoin enthusiast Jack Dorsey, has offered Bitcoin trading support since 2018 through its subsidiary payment service, CashApp. Despite these efforts, Block’s stock has fallen by 31% since the start of the year.
Similarly, PayPal has experienced a 27% decline since the beginning of the year, despite holding substantial crypto assets on behalf of its users and launching its own stablecoin, PYUSD.
Publicly traded Bitcoin mining companies have also outperformed Bitcoin in 2023, achieving an average return of 148.59%.
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