Panic buying keeps pouring in, BTC get back to $45,000 before the halving?

Author: BitpushNews Mary Liu

On expectations of BTC spot ETF approval and bets on U.S. interest rate cuts, BTC (BTC) hit a fresh 19-month high, briefly topping above $42,000 and trading at $41,809 as of Monday’s U.S. stock close, up 5.8% in the past 24 hours. ETH Fang (ETH), BNB and ADA rose 2%~3% on the day, and XRP was flat. TradingView data shows that the rise in BTC has pushed the total crypto market capitalization to more than $1.5 trillion for the first time since May 2022, when the collapse of Terra kicked off a nearly 2-year bear market in the industry.

“Panic Buying”

Expectations of a Fed rate cut, an upcoming spot BTC ETF decision, and money flowing into digital asset funds supported the rally in crypto prices, triggering some “panic buying” that drove prices higher, analysts said.

Bitui previously reported that the SEC recently met with representatives of companies from Grayscale, BlackRock and Nasdaq. Last Thursday, the SEC met with Grayscale to discuss the possibility of converting GBTC into an ETF, a move that the SEC had previously blocked, and the new interaction appears to confirm the SEC’s shift in attitude and strengthen the market’s confidence that the BTC ETF may eventually be approved.

The vast majority of market watchers expect the SEC to approve spot BTC ETFs in early January.

Crypto investment services provider Matrixport noted in a report on Monday that BTC perpetual futures have a high level of premium to spot prices, suggesting that traders are flocking to BTC for fear of missing out on the upside.

“Traders do not have sufficient upside leverage, which is the conclusion of the high premium of perpetual futures trading,” the report said. The report explains that for most of the year, perpetual futures have traded at a premium of about 5-10% to the spot price, with the premium widening to 10-15% and sometimes even 20-30%.

“This suggests panic buying among traders who are unwinding short positions or increasing leveraged longs,” Matrixport analysts said. ”

According to the latest report on the flow of funds by asset manager CoinShares, investors continue to put their money into crypto funds. Last week, crypto funds saw a net inflow of $172 million, the tenth consecutive week of net inflows, bringing the total to $1.7 billion.

The macroeconomic environment also supports BTC price increases. Alex Thorn, head of research at digital asset investment firm Galaxy, said in a note: "Dovish comments from some Fed officials, a weak dollar, and relatively strong domestic data helped drive the market over the weekend. ”

According to the CME FedWatch tool, market participants are increasingly betting on the Fed to cut interest rates next year, with an 86% chance of a rate cut in May.

Technical Analysis: BTC Back to $45,000 Before Halving?

Crypto analyst @rektcapital posted on Platform X to assess BTC price trends and predict that BTC could return to the $45,000 level before the fourth halving event scheduled for April 2024. Analysts point to a trend that has been repeated over the past three cycles and predict a pullback to the $42,000 level after BTC hits $42,000.

Analysts at Santiment assessed the BTC price trend and found that market participants were experiencing “fear of missing out” (FOMO). Analysts believe that sooner or later, BTC price may return to $50,000, depending on whether BTC traders take profits or continue to buy so that high demand pushes the rally on.

Antoni Trenchev, co-founder of digital asset firm Nexo, said on the X platform: “With $40,000 back on the ground for the first time in nearly 19 months, $48,000 and $52,000 look set to be the next significant boundary.” ”

“The speed at which BTC move towards $50,000 is likely to depend on when the spot BTC ETF is approved, and even then, there is no guarantee that the approval will necessarily bring a ‘rocket booster’ to the BTC price,” he stressed. ”

Caution is needed in the short term

Analysts say that while the outlook for BTC looks bright, there may be some headwinds in the near term.

Bitfinex analysts said in a note on Monday that “the reason for concern is the lack of follow-up in the spot market, even though the selling pressure in the futures market has been exhausted.” “The reasons could be multifactorial, including short-term investors who are still expecting prices to fall and are therefore caught off guard and are now waiting for confirmation before entering long positions, or simply smaller market participants driven by the high returns of altcoins,” the report added. ”

Another reason to be cautious is that about 85% of BTC addresses are profitable, so “further gains could lead to profit-taking.” ”

However, Thorn remains bullish on the way forward, stating that “despite the run, the fundamentals of the BTC have not been undermined, the outstanding factors are decreasing (bad actors exiting, bankruptcy resolution), catalysts are on the horizon (cash ETFs, halving), holders remain firm, and a constructive macro environment and institutional engagement remain dominant.”

“The BTC is up more than 150% so far this year and is one of the best performing assets globally from a risk-adjusted perspective,” he said. ”